Analysts expect USDA to peg the average soybean yield at about 41 bu./acre in the Sept. 12 Crop Production report, but late-season weather and USDA’s reporting history leave the market open to more adjustments.
“With beans, you don’t fully know how they’re going to pan out until we’re all the way through August,” said Jason McKibben, a grain marketing adviser with AgriSource, Inc., West Des Moines, Iowa. “A lot of areas have had favorable weather of late,” providing cooler temperatures and additional rain. “We think that has added to the yields.”
AgriSource this month estimated soybean yield prospects at a national average 41.5 bu./acre, putting it in the upper end of trade estimates that range from 40 bu. to 41.8 bu. The trade’s average estimated yield would produce a crop of 3.025 billion bushels on the acreage reported in August.
Last month, USDA projected a national average soybean yield of 41.4 bu. and a crop of 3.056 billion bushels. Since July 31, the percentage of the crop rated good to excellent in the major soybean states slipped from 60 percent to 56 percent.
Tim Hannagan, analyst at PFGBest in Chicago, said a new USDA estimate equal to or slightly higher than the average trade guess would lead to a higher open for futures, followed quickly by selling. “If the production number comes in under 3 billion bushels, we push November futures to the $14.80 area,” said Hannagan in a Sept. 9 report.
Some analysts expect USDA to revise acreage.
AgriSource analysts dug through certified acreage and insurance data to study potential acreage changes. “Corn acreage could decrease around 500,000 to 600,000 acres and bean acreage could increase by similar numbers,” said McKibben. Iowa and Nebraska each could see about 150,000 fewer corn acres and a similar gain in soybean acres.
History Favors Lower Yield
University of Illinois economist Scott Irwin says history favors a downward adjustment in USDA average yield estimates. He and fellow economist Darrel Good found four years since 1970 in which weather conditions resembled 2011 conditions in Illinois. Yield changes in Illinois are very closely correlated to changes in the U.S. yield.
“In three of the four years in corn and soybeans, USDA’s yield estimates declined from August to the final in January,” said Irwin. The average national yield decline from the August estimate to the final report in those four years for soybeans was 1.2 bu. Irwin and Good posted a written report on their findings in farmdocdaily.
USDA’s yield and crop projections quickly get closer to the final estimates in fall, noted Irwin. And initial yield reports soon will filter into the markets. Soybean harvest normally starts by Sept. 10 in Alabama, Arkansas, Louisiana, Mississippi, Oklahoma, and Texas. By Sept. 20, early harvest normally starts in several Corn Belt states.
For More Information
AgWeb.com will have full coverage of the Sept. 12 reports, following the 7:30 a.m. report releases.
Read more pre-report news.
