Don’t Expect Much Of A Yield, Production Adjustment After Today

03:00PM Oct 10, 2019
USDA Report
USDA Report
( MGN Online )

Thursday’s USDA Crop Production report increased corn average yield slightly to 168.4 bu. per acre, up 0.2 bu. per acre from September. Soybean estimated yield dropped 1 bu. per acre to 46.9 bu. per acre for the national yield estimate. Overall production projections for both crops are down slightly.

“Traditionally you don’t see much changes in area or yield from here,” says Seth Meyer, with the University of Missouri. “[The only potential way it would change] is we could have unusual circumstances like the cold weather front coming down on immature crops.”

Areas of the northern U.S. are experiencing an exceptional cold front. Time will tell if this has an impact on yield and production.

Corn yield increased because of better data. Earlier in the season, USDA relies heavily on farmer surveys to estimate yields. Today, the agency has a better look at what’s going on in fields, Meyer says.

“We saw the yield increases sprinkled around states—and in some surprising states like Ohio, Indiana and Michigan,” he says. “Areas with early season planting problems are where we saw increases in those areas and in states surrounding the Corn Belt.”

In terms of corn production, carryout is decreasing but overall export and ethanol demand is still eroded.

“We need to be more competitive with Brazil,” Meyer says. As far as potential demand from ethanol, even with a new deal in place Meyer doesn’t anticipate it to bring a short-term jump.

“You have to build a base of demand,” he says.

Soybean carryover has dropped dramatically. “We thought it would take three years to cut carryover [like this], and we’ve done it in one,” Meyer says.

Compared to the beginning of the year, the U.S. has about half the soybean carryover it started with.

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New Crop Production Numbers Sink Corn Futures