USDA will release an updated look at U.S. crop yields on Monday. After Pro Farmer’s Crop Tour revealed trouble spots along the Corn Belt, Pro Farmer’s corn production estimate also showed a projection far below USDA’s August report.
“This report is going to be huge with respect to yield,” says Jim Mintert, professor at Purdue University and director Center for Commercial Agriculture “I think a lot of people are expecting the corn yield number to come down, the question is going to be how much.”
Mintert says yield projections are all over the board, including some that he called “shockingly low.”
“I think that the trade probably expected a reduction in supply, that’s probably getting them out to about 250 to maybe 275 billion bushels, which will tighten things up quite a bit. And so it’ll be interesting to see if that materializes on the soybean side, there’s probably more of a question mark there, because of the impact of some late season rains and what’s going to happen with respect to yield,” Mintert adds.
Mintert doesn’t expect a major change on the supply and demand balance sheets for soybeans, but possibly a larger change on the corn supply situation.
The Major Question About China
Another major question is China, which is one that won’t be completely answered in this report.
“One of the issues that has been talked a lot is what are the grain stocks that China may have? And how are those going to be released,” says Ariana Torres, associate professor of Agricultural Economics with Purdue University. “Also, what is that transparency that China may have to release those grain socks or oil?”
Torres says with the situation in Ukraine, the U.S. relies on stocks of a number of goods that are currently sitting in countries like China.
“We need to understand how are you going to feed the world population when the biggest storage needs to start to release those crops, because there’s going to be a lag in production and a lag in infrastructure and Ukraine,” adds Torres. “We need to understand how we’re going to keep that supply of food, grains, cereals, to the world and wherever it is needed.”
