USDA’s highly anticipated release of its final 2019 crop production and quarterly stocks estimates didn’t spark any fireworks in the markets Friday.
Instead, bullish quarterly stocks estimates were offset by a surprising increase in national yield averages for corn and soybeans that muted market reaction.
“This report really focused on the U.S. production balance sheet. And there were some surprises,” Joe Camp, AgriVisor manager, told the RFD Radio Network. “The yield for both corn and soybeans went up. That’s in the wrong direction relative to trade expectations.”
USDA pegged 2019 crop production at 13.7 billion bushels of corn, down 5% from the revised 2018 estimate, and 3.56 billion bushels of soybeans, down 20% from the previous year.
The final U.S. yield estimates total 168 bushels per acre of corn, down 8.4 bushels from 2018 but up 1 bushel from last month, and 47.4 bushels per acre of soybeans, down 3.2 bushels from 2018 but up a half bushel from the previous estimate.
Those estimates could still change, though, as USDA plans to resurvey farmers in the northern U.S. who weren’t able to complete the 2019 harvest due to late crop maturity and a flurry of weather challenges.
“The report was somewhat neutral,” Ami Heesch, of CHS Hedging, said during a conference call hosted by the Minneapolis Grain Exchange. “It may take until June to get clarification (on final harvest numbers).”
As it stands now, average yields declined in 26 states for corn and 22 states for soybeans in 2019 compared to 2018.
In Illinois, USDA pegged the 2019 average corn yield at 181 bushels per acre, down 29 bushels from the 2018 record. The average soybean yield in the state, 54 bushels per acre, represents a 9.5-bushel decline from 2018.
Illinois crop production estimates total 1.84 billion bushels of corn, down from 2.26 billion in 2018, and 532 million bushels of beans compared to 666 million the previous year.
“There’s still plenty of questions about yield going up in a questionable year like 2019,” Camp said. “But, the quarterly stocks report showed less bushels on hand than anticipated. That’s ultimately viewed as friendly for the market.”
Corn stored in all positions totaled 11.4 billion bushels as of Dec. 1, down 5% from the same time last year. Soybeans stored in all positions totaled 3.25 billion bushels last month, down 13% from the previous year.
Farmers held fewer bushels of both crops Dec. 1 compared to the previous year with 7.18 billion bushels of corn and 1.53 billion bushels of beans stored on farms, down 4% and 21%, respectively.
“From here I think the market will focus on South American weather,” Heesch added. “The March 31 (U.S.) planting intentions report will be the next biggie for market direction.”