Growers and analysts alike have plenty to reconsider after Friday’s USDA reports contained record-breaking crop estimates for corn and soybeans.
According to the agency’s August Crop Production report, U.S. growers could reach a record yield of 175.1 bpa for corn and production of 15.2 billion bushels and 48.9 bpa for soybeans, with production of 4.06 billion bushels. These forecasts far surpassed the average trade estimates. Analysts had expected a corn yield of 170.6 bpa and a soybean yield of 47.5 bpa, with corn production of 14.757 billion bushels and soybean production of 3.941 billion bushels.
The significantly higher numbers came as a surprise to many growers, who expressed skepticism about the bumper yield estimate. “175.1 (is the) funniest damn thing I heard all year,” said an Iowa farmer in comments on AgWeb. “They better take a look in the middle of the field instead of the outside row.”
In the trade, the reaction was less dramatic. “I think farmers are sometimes afraid to realize the potential of how good they are at what they do,” said Tommy Grisafi of Advance Trading in Indiana, speaking in a Facebook Live segment with U.S. Farm Report host Tyne Morgan.
And, given USDA’s typical forecasting pattern, this big 2016 crop could get even bigger. “It’s not like USDA to put out a big number and then start to go back. They come out with a number and then start to inch it up,” Grisafi said. “What I think people are shocked about is that we went from a 168 (yield estimate) to 175. … It’s going to give the market lots to trade.”