USDA’s most recent Crop Production reports have slowly made cuts to national yield forecasts, but is the trend likely to continue in the upcoming October report? According to the latest Ag Economists’ Monthly Monitor, economists expect USDA to make slight adjustments to yield but nothing major.
USDA’s next report is set to be released on Thursday, October 12. Just a couple weeks ago, there were questions about if we’d have an October report at all. As the possibility of a government shutdown grew, USDA reports were at risk. In the September report, USDA lowered its national corn yield forecast to 173.8 bu. per acre average, which was a 1.3-bu. per acre cut from August. USDA trimmed its soybean yield estimate by 0.8 bu. per acre, to 50.1 bu. per acre.
The September Ag Economists’ Monthly Monitor, which was sent out just days after the September Crop Production report, revealed ag economists think USDA isn’t far off with its current estimates. According to the Monthly Monitor, economists estimate a corn yield average of 173 bu. per acre and 49.4 bu. per acre for soybeans, both just slightly lower than what USDA said in September.
Dan Basse, of AgResource Company, thinks there is room for USDA to make adjustments in the September report, even more than what the economists said in the Monthly Monitor.
“We believe they’ll cut another bushel or two from the corn yield, maybe a bushel from soybean yield,” says Basse. “We’re thinking about a 171 or 172 [bu. per acre] U.S. corn yield and a 49 [bu. per acre] bean yield.”
Basse says based on field reports they’re hearing, farmers are just starting to get into the soybeans that were hit hard by the heat and dry weather last month.
“The Group 3 beans are really getting hit because of the dryness in September. Those are the beans that mature later,” Basse says. “The corn and bean markets are getting close to some seasonal lows. They normally happen around Columbus Day. And as we start to think about the market longer-term, we pivot our attention to South American weather which is abnormal, at least today.”
Basse points out that Argentina is starting off the year with another battle with drought.
“Argentina is going through a third year of drought. There’s too much rain in southern Brazil. My Brazilian office is already hearing farmer complaints about what’s occurring, at least with early seeding. So we’re worried about South America, and that may give the market a bump.”
Basse says considering revenue insurance is being dictated in the month of October, most farmers would rather see a rally in the market early September or early November, instead of during the month of October.
