Big Crop, Big Yield Predicted by USDA

USDA’s crop yield and production estimates released Friday broke new ground, and shocked traders in the process.

The ag department’s August forecast, which incorporated field checks and farmer surveys, for the first time ever pegged corn production above 15 billion bushels and soybeans above 4 billion bushels nationwide.

The current crop production forecasts, 15.2 billion bushels for corn and 4.06 billion bushels for beans, are up 11 percent and 3 percent from last year, respectively, and would set new records.

The massive crop estimates are the result of record yields, pegged at 175.1 bushels per acre for corn and 48.9 bushels per acre for beans, and increased harvested acreage due in part to fewer prevent plant acres this year.

(Photo by Catrina Rawson)

USDA estimates harvested acres this fall could total 86.6 million for corn, up 7 percent from last year, and a record 83 million for beans.

USDA field checks also found record corn ear weights.

“Call it a shocker once again from USDA,” Joe Camp, AgriVisor risk management specialist, told the RFD Radio Network^®. “We’ve got yield estimates that came in well above the average trade expectation and above the top end of what analysts expected.”

The high end of yield expectations was around 175 bushels for corn and 47.5 bushels for beans.

In Illinois, yields are forecast to set a new record for beans (57 bushels per acre, up from 56 last year) and tie the 2014 record for corn at 200 bushels per acre (up 25 bushels from 2015).

“The big numbers are the corn and soybean yield estimates,” Mike Krueger, analyst with The Money Farm, said during a teleconference hosted by the Minneapolis Grain Exchange. “They blew away the (trade) yield estimates.”

Crop markets nosedived after the release of the report Friday as bearishness ruled the day.

USDA, in its world ag supply and demand report, lowered its 2016-17 season-average price forecasts by a quarter for corn (to a range of $2.85 to $3.45 per bushel) and by 40 cents for beans (to a range of $8.35 to $9.85 per bushel).

“There’s no joy in Mudville today, at least from a price standpoint,” Krueger said.

Prices were also pressured from ending stocks estimates, which total 2.4 billion bushels of corn, 330 million bushels of beans (up 40 million from last month) and 1.1 billion bushels for wheat (up 19 million bushels).

“We haven’t seen (ending stocks) numbers like this (for corn) for probably at least a decade,” Krueger said.

The silver lining of the estimates was on the demand side. USDA raised corn use by 300 million bushels to a record 14.5 billion bushels.

USDA raised export expectations by 125 million bushels for corn, 30 million bushels for beans and 25 million bushels for wheat.

“If there’s a glimmer of hope, it’s that even though we have a record soybean yield, we needed it because demand is so great,” Krueger added.