USDA’s estimate for soybean yield will garner lots of attention in its September report due Friday, Pro Farmer Editorial Director Chip Flory noted on Wednesday’s broadcast of Market Rally.
The soybean yield estimate will be of particular interest. USDA has reported virtually no change in soybean crop conditions in recent weeks, despite temperatures being well-above-average across the Midwest during key periods of crop development.
The U.S. soybean crop rating in Tuesday’s crop conditions report for the week ending Sept. 6, were 63% rated good-to-excellent, which was unchanged from the prior week. The soybean crop condition rating is also relatively unchanged since USDA’s Aug. 12 report. In that release, USDA pegged soybean yield estimate at 46.9 bu./acre, which was below last year’s yield figure of 47.8 bu./acre.
Jerry Gidel, feed grain analyst at Rice Dairy, LLC, holds a less optimistic view on soybean yield: 45 bu./acre.
“I think, unfortunately, this whole summer the crop conditions have really not been much of a barometer for us to give us a sense of really what’s happening with the crop out there,” Gidel said Wednesday on Market Rally.
Reuters this week reported an average trade guess on soybean yield at 46.4 bu./acre, according to their latest survey of traders. The estimate was down 0.5 bu./acre from USDA’s August estimate on soybean yield.
Total U.S. soybean production in Reuters’ trade survey, meanwhile, was projected to shrink to 3.869 billion bushels in Friday’s report, down 47 million from USDA’s August estimate.
Soybean Export Demand
The demand side of the ledger is also key in this report, Gidel stressed, with particular attention on exports.
While recent turmoil in the Chinese economy has caused widespread concern, the fears have been overblown, according to Gidel
“We’ve got tremendous, tremendous demand under these markets right now,” he said. While China might decrease imports of other commodities such as iron ore, Chinese consumers are not likely going to eat less meat, Gidel said, which will continue to support China’s demand for animal feed like soybean meal.
The overstated concern of China’s economic woes and the effect on the soybean market, Gidel said, are similar to the financial markets’ past reactions to concerns over other global economic issues, where volatility in financial markets spilled over to commodity markets.
“It was the EU two or three years ago, it was Greece last year, and now we have to have the Chinese economy in the bucket here for everyone to kick around for a little bit,” Gidel said.
In the August report, USDA forecast U.S. soybean export demand at 1.725 billion bushels, down from 1.825 billion bushels last year.
USDA will release its updated numbers at 11 a.m. Central on Friday, Sept. 11.
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