On Friday, USDA released their August World Agriculture Supply and Demand Estimates (WASDE) and Crop Production reports. Both reports included some information that surprised both farmers and traders alike.
USDA’s yield estimates for corn and soybeans were both above the average trade guess coming in at 178.4 bu. per acre for corn, and 51.6 bu. per acre for soybeans.
The nation’s total soybean crop is forecasted to reach 4.59 billion bu., 4% higher than last year, on 88.9 million acres. Corn production across the U.S. is forecasted at 14.6 billion bu., down less than 1% over last year on 81.8 million acres to be harvested for grain.
USDA’s Crop Production report indicates that Illinois, Indiana, Nebraska, Ohio, North Dakota, and South Dakota will have corn yields above a year ago. The corn yield for Iowa is unchanged relative to last year, but yields are expected to be lower than last year in Missouri, Minnesota, and Kansas.
“Now you look at some of the conditions and the drought conditions in Missouri and southern Iowa and we don't know how the crop is going to finish quite yet,” AgriTalk After The Bell host Chip Flory said on Friday’s show. “I mean it's looking pretty good, it’s the above normal daytime temperatures that are going to take a little bit off the kernel size and the fill, we don't know how it's going to finish yet. But it's a really good crop out there.”
As a result, the corn and soybean markets took a dive on Friday. Will they stay under pressure? Flory says there’s a 50/50 chance corn yields are higher or lower than the August estimate.
“For beans there is a two thirds chance,” he said Friday. “There is a two-thirds chance the final crop will be higher than August. Fourteen years of the August estimate was too low. Six years the August estimate was too high.”