Farmers finally got some good news from USDA in the Nov. 10 World Agricultural Supply and Demand Estimates. While it is rare for corn yield to go down from October to November, the agency provided a bullish surprise with a bigger-than-expected cut. Even soybeans saw a friendly report with tighter ending stocks despite higher yield.
USDA lowered corn yield 1.6 bu. per acre from October to 179.6 bu., which was below trade estimates. Of note when it comes to individual states:
- Illinois: Down 8 bu. (to 200 bu. per acre)
- Indiana: Down 5 bu. (to 195 bu. per acre)
- Missouri: Down 5 bu. (to 176 bu. per acre)
- Nebraska: Down 4 bu. (to 184 bu.per acre)
- Minnesota: Up 9 bu. (to 204 bu. per acre)
- Iowa: Unchanged at a record 219 bu. per acre
“There was just way too many really highly productive areas in Illinois where you heard growers talking 20 to 50 bu. off of a year ago,” says Matt Bennett with AgMarket. “The thing is we had too much of a good thing in June. We talked about it over and over, but we lost so much nitrogen in areas that were just saturated.”
The yield cut lowered corn production by 141 million bushels. Usage was lowered 50 million between exports and feed and residual, leaving a 91 million bushel cut to ending stocks, at 1.758 billion bushels.
“When you look at stocks-to-use dropping to 10.8% today, there were a lot of folks saying, ‘Hey, we’re looking at a 13% to 14% stocks-to-use the way this market’s trading.’ Well, not so fast. That has changed a little bit,” Bennett says.
Bennett thinks corn yield may fall further in future reports with nearly 20% of the corn still left to harvest.
“Yeah, my gut feeling is that USDA would probably trim a little bit more off the corn yield. Iowa still seems a little rich to me at 219,” he says.
Soybeans: Little Room for Error
With ample rains during August, USDA raised soybean yield by 0.2 bu. per acre, to 53.3 bu., which was lower than expected. State yield shifts include:
- Illinois: Down 4 bu. (to 64 bu. per acre)
- Minnesota: Up 5 bu. (to 54 bu. per acre)
- Iowa: Up 2 bu. (to 65 bu. per acre)
- Nebraska: Up 3 bu. (to 62 bu. per acre)
- South Dakota: Up 3 bu. (to 45 bu. per acre)
“I feel like this bean yield could grow from here. I think we could see something closer to 54 when it’s all said and done,” Bennett says. “No doubt the anecdotal reports have been nothing short of impressive. A lot of folks talking about record yields.”
However, even with a 12 million bushel increase in soybean production, USDA raised exports by 25 million bushels and cut ending stocks by 15 million down to 300 million bushels. Bennett says that leaves little room for error.
“The soybean carryout of 300 tells me that you don’t want to lose a lot of soybean acres. It could be interesting,” he says. “What does that tell you? It tells you you cannot afford a weather hiccup out of South America.”
U.S. wheat carryout was raised just 3 million bushels, but world ending stocks grew by 4.8 million metric tons to 280.8.
