USDA made a cut in yields to the nation’s corn and soybean crops in the September Supply and Demand report on Friday.
Even with the cuts, the agency is still calling for big production numbers, with corn yields projected to be 186.7 bu. per acre; that’s down more than 2 bu. from last month. But production numbers are now at a record 16.8 billion bushels, up 72 million bushels due to an increase in acres.
For soybeans, USDA is forecasting a yield of 53.5 bu. per acre. That’s down .1 bu. from last month with production now expected to be 4.3 billion bushels.
Old crop ending stocks for corn were pegged at 1.3 billion bu., up slightly from August. Soybeans and wheat are unchanged. And new crop corn is now at 2.11 billion bu., down a bit from last month.
New crop soybean ending stocks are at 300 million, up 10 mi. bu. from last month while wheat carryover was cut 25 million bu. to 844 million bushels.
The trade expected the cut in corn yield, but not the increase in production. It was a function of USDA again raising harvested acres by 1.3 million to 90 million acres, the highest since 1933.
Market analysts say with USDA lowering corn yield by 2.1 bu. per acre to 186.7, it is an early acknowledgment that yield and production will need to come down in future reports.
However, they don’t believe the impact of disease pressure and a dry finish to the corn crop are fully accounted for. They say early harvest reports are already indicating corn yields well below last year and predict USDA will need to drop yield in the future, maybe below last year’s 179.3 bu. final.
“I don’t know if we’re going to make 175 as a nation,” says Darren Frye, president, Water Street Solutions. “The reason I say that, we’ve had so much disease, and disease can take a yield from 250 to 180 pretty quick in a field. So, if you have enough of that across Iowa, Illinois and in Nebraska, southern Minnesota, it’s really going to hurt, and it’s going to be really difficult to keep that average above last year.”
Soybean yields were shaved by 0.1 bu. to 53.5, but analysts say they are also likely to drop in the future due to disease pressure across the Corn Belt and frost damage in the North. Plus, there were parts of the Eastern Corn Belt recording the driest August in over 130 years.
“I mean, there’s multiple reports from across the Corn Belt of growers seeing pods on the ground,” says Matt Bennett, AgMarkret.net. “They just simply aborted. And so where do I see yields going? I think you’re going to have to come down 2 bu. to 3 bu. from here. I think that in October, you’ll probably get a revision lower, but where you’re really going to see damage, which I think Darren alluded to, is the later planted beans.”
Bennett thinks that could drop the final national soybean yield below last year to around 50 bu. per acre.
He says it might take that big of a yield cut to keep ending stocks around 300 million bushels on soybeans, because analysts say that doesn’t fully account for lost export demand to China.
