USDA lowered its estimates for corn and soybean yields Tuesday in a move generally expected following hot and dry weather in August.
The new World Agricultural Supply and Demand Estimates report, the first of the year after field sampling, lowered USDA's average yield estimate for this year’s corn crop to 173.8 bushels per acre — a 1.3-bushel decrease from the August WASDE, which itself was a 2.4-bushel drop from the July report — but the department ended up raising its production forecast. Larger harvested area, USDA said, “more than offsets a reduction in yield.”
USDA raised its estimate for harvested corn area to 87.1 million acres, up from 86.3 million acres. As for production, USDA now says it is expecting 15.134 billion bushels this year — a small increase from 15.111 billion in the August WASDE.
“With supply rising slightly and use unchanged, ending stocks are up 19 million bushels to 2.2 billion (bushels),” USDA said in the report.
Alan Brugler, an analyst with Barchart, said the report sent corn futures prices tumbling initially because of the unexpected increase in USDA’s production forecast.
As for soybeans, USDA dropped its average yield estimate to 50.1 bushels per acre, a 0.8-bushel drop from last month’s WASDE, which included a 1.1-bushel decrease from July. USDA did raise its harvested area estimate for soy, but also cut its production forecast, as generally expected.
USDA is now predicting U.S. soybean production this year will total 4.146 billion bushels, down from the August forecast of 4.205 billion bushels.
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Brugler, in a separate report released by Barchart, said soybean futures “dropped sharply after seeing the updated USDA” supply and demand estimates.
“The soybean crush forecast is reduced 10 million bushels and the export forecast is reduced 35 million bushels on lower supplies,” USDA said. “Ending stocks are projected at 220 million bushels, down 25 million from last month.”
Meanwhile, USDA made significant changes to its supply and demand estimates for this year’s rice crop. The September WASDE contains increases for both long-grain and medium- and short-grain rice. USDA now says it is forecasting all-rice production to reach 220.9 million hundredweight “on higher harvested area and yields.”
“The average all-rice yield is up 52 pounds per acre to a record 7,751 pounds (per acre),” said USDA in the September WASDE.
Tuesday's report marked the 50th anniversary of the WASDE publication, an event marked by Ag Secretary Tom Vilsack at USDA's Washington headquarters.
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