USDA’s crop production and yield estimates declined from Aug. 1 to Sept. 1 as adverse weather conditions took the top end off corn and soybean potential.
The Ag Department projects a U.S. corn crop of 14.9 billion bushels, down 2% from the August estimate, with an average yield of 178.5 bushels per acre (down 3.3 bushels).
Soybean production this harvest looks to be 4.31 billion bushels nationwide, down 3% from the August estimate, with an average yield at a record 51.9 bushels per acre, down 1.4 bushels from the previous forecast.
“This report was quiet. There’s not a lot of fresh news,” Karl Setzer, AgriVisor commodity risk analyst, told the RFD Radio Network. “The trade dialed this in as far as the estimates.”
Corn yield estimates declined in the “I” states compared to August estimates by 4 bushels per acre in Illinois, to 203 bushels, 11 bushels in Iowa (191) and 2 bushels in Indiana (186). This month’s soybean yield estimates declined by 2 bushels in Illinois, to 62 bushels per acre, 4 bushels in Iowa (54) and 1 bushel in Indiana (60).
“The 191-bushel yield in Iowa was a littler higher than the trade expected (in light of extensive wind damage and severe drought issues),” Setzer said. “That might be the only surprise on the corn side.”
The combination of reduced crop output and solid demand provided support for the markets heading into the thick of harvest.
USDA cut its estimate of corn ending stocks by 253 million bushels to 2.5 billion bushels. A 100-million bushel boost in exports was offset by a 100-million drop in ethanol use, but supply fell more than use, overall.
“Globally, we have a 306.8 million metric ton carryout expected (for corn). That’s close to 5 million metric tons less than the trade was expecting and almost 11 million metric tons below the August forecast,” Setzer said. “That’s giving us support.”
USDA raised its season-average price estimate for corn by 40 cents to $3.50 per bushel.
Meanwhile, USDA left its estimates of soybean crush and exports unchanged. But, the expected drop in production pushed soy ending stocks to 460 million bushels, down 150 million bushels from the previous forecast.
“Soybean ending stocks will be the big question,” Setzer said. “The 460 million bushel (estimate) was 9 million less than the trade expected.”
USDA subsequently raised its season-average price estimate for beans to $9.25 per bushel, up from $8.35 last month.
The season-average price for wheat remains unchanged at $4.50 per bushel.