USDA crop report surprises grain trade

There was a lot of anticipation leading into August 12 USDA Crop Report, due to very favorable crop conditions in Upper Midwest in states such as Minnesota, Iowa and South Dakota. This was offset by the very poor growing conditions that have persisted during the growing season in Illinois, Indiana, Ohio and Missouri, which were severely impacted by very late planting and record rainfall amounts in June. This lead to a significant amount of prevented planted and drowned out crop acres in certain areas, which is likely to impact final 2015 corn and soybean yield results.

The USDA Crop Report issued on August 12 estimated the 2014 total U.S. corn production to be just under 13.7 billion bushels, which would be third-highest U.S. corn production in history. The 2015 projected corn production would be down about 4 percent from the record 2014 production level of 14.2 billion bushels, and compares to 13.9 billion bushels in 2013, 10.8 billion bushels in 2012, and 12.3 billion bushels in 2011. Based on August 1 conditions, USDA is estimating total harvested corn acreage in the U.S. for 2014 at 81.1 million acres, which is unchanged from June USDA estimates, but is down from the 2014 level of 83.1 million harvested corn acres. Some experts feel that the total number of harvested corn acres in 2015 may decline due to the large amount of damaged corn acres in states such as Indiana, Ohio, and Missouri.  

In the August 12 Crop Report, USDA projected a national average corn yield of 168.8 bushels per acre in 2015, which is down from the record national corn yield of 171.0 bushels per acre in 2014, but would still be the second largest U.S. corn yield in history. Previous national average corn yields were 158.8 in 2013, 123.4 bushels per acre in the drought-year of 2012, and 147.2 bushels per acre in 2011. The USDA projected national average corn yield was approximately 4 bushels per acre higher than average national yield estimates of grain marketing professionals.

USDA is projecting Minnesota’s 2015 average corn yield at the record level of 184 bushels per acre, which compares to 158 bushels per acre in 2014, 160 bushels per acre in 2013, 165 bushels per acre in 2012, and 156 bushels per acre in 2011. The previous record average corn yield in Minnesota was 177 bushels per acre in 2010. USDA is now projecting Iowa’s 2014 average corn yield at 183 bushels per acre, which compares to 178 bushels per acre in 2014, 165 bushels per acre in 2013, the drought-reduced yield of 137 bushels per acre in 2012, and 172 bushels per acre in 2011.

The 2015 USDA corn yield estimates for the other major corn producing states are Illinois at 172 bushels per acre, compared to 200 bushels per acre in 2014; Indiana at 158 bushels per acre, compared to 188 bushels per acre in 2014; Ohio at 168 bushels per acre, compared to 176 bushels per acre; Nebraska at 187 bushels per acre, compared to 179 bushels per acre in 2014, and South Dakota at 160 bushels per acre, compared to 148 bushels per acre in 2014.

The USDA Report on August 12 estimated total 2015 U.S. soybean production at 3.92 billion bushels, which would be the second largest in history. The projected 2015 U.S. soybean production is approximately 1 percent below the record 2014 total production level of 3.97 billion bushels. USDA is now estimating total 2015 harvested soybean acreage at 83.5 million acres, which compares to 83.1 million acres in 2014. Some experts again feel this number could be lowered in future months, due to the poor growing conditions that have existed in the southern and eastern Corn Belt.

The U.S. average soybean yield for 2015 is estimated at 46.9 bushels per acre, which would be the second highest U.S. soybean yield in history. The 2015 yield is slightly below the record U.S. average soybean yield of 47.8 bushels per acre in 2014. Minnesota’s 2015 average soybean yield is estimated at the record level of 48 bushels per acre, compared to 42 bushels per acre in 2014. The current record State soybean yield was 45 bushels per acre in 2010.

Other projected 2014 yields in major soybean producing States include Iowa at a record level of 52 bushels per acre, compared to 51.5 bushels per acre in 2014; Illinois at 53 bushels per acre, compared to 56 bushels per acre in 2014; Indiana at 49 bushels per acre, compared to 56 bushels per acre in 2014; Ohio at 48 bushels per acre, compared to 52.5 bushels per acre in 2014. Nebraska at 56 bushels per acre, compared to 54 bushels per acre in 2014; and South Dakota at 45 bushels per acre, which is the same yield as 2014. Some experts feel that the USDA 2015 soybean yield estimates for some States may be a bit high, given the challenging growing conditions that have existed.

WASDE recap

The updated USDA World Supply and Demand Estimates (WADSE) were also released on August 12, which included the 2015 estimated U.S. corn production of 13.69 billion bushels. The report had minor adjustments in the beginning corn stocks and expected corn usage in 2015-16, resulting in projected corn ending stocks at the end of the 2015-16 marketing year of 1.79 billion bushels, which is up 114 million bushels from the July WADSE Report. Corn ending stocks are estimated to be near 1.8 billion at the end of the 2014-15 marketing year on August 31, 2015. By comparison, corn ending stocks were only 1.18 billion bushels at the end of the 2013-14 marketing year.

USDA is projecting an average on-farm corn price for the 2015-16 marketing year, which runs from September 1, 2015, through August 31, 2016, in a range of $3.35 to $3.95 per bushel, with an average expected price of $3.65 per bushel. The August estimated average 2015-16 corn price was lowered by $.10 per bushel from the July price estimates, and if achieved, would be the lowest national average corn price in several years. The 2014-15 national average corn price, which will be finalized on September 30, 2015, is now estimated at $3.70 per bushel. This compares to 12-month national average prices of $4.45 per bushel for 2013-14, and $6.89 per bushel for 2012-13.

The recent WADSE estimates are projecting a very large U.S. soybean production of 3.92 billion bushels in 2015, with only minor adjustments in expected soybean usage. If achieved, this would result in estimated 2015-16 soybean ending stocks at 470 million bushels, which is up 45 million bushels from the July WADSE estimate. USDA is estimating 2014-15 soybean ending stocks at 240 million bushels, which is considerably higher than the 2013-14 ending stocks of 140 million bushels.

USDA is now projecting an average on-farm soybean price for the 2015-16 marketing year in a range of $8.40 to $9.90 per bushel, with an average expected price of $9.15 per bushel. Similar to corn, this price estimate would be the lowest national average soybean price in several years. The 2014-15 final national average price is now estimated at $10.05 per bushel, which compares to 12-month national average prices of $13.00 per bushel for 2013-14, and $14.40 per bushel for 2012-13.

TAGS: Soybeans Corn
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