The industry was expecting a drop in USDA’s newest estimates for corn and soybean production after August weather challenges, and the agency delivered on Sept. 10 – though not as much as some analysts expected. Sources said the revised figures will likely fuel higher grain prices and keep the bulls running in the fertilizer markets.
Corn production is forecast at a record 13.2 billion bushels, down 2 percent from the August forecast, but up from the previous record of 13.1 billion bushels set in 2009. Based on conditions as of Sept. 1, yields are expected to average 162.5 bushels per acre, down 2.5 bushels from the previous month and 2.2 bushels below last year’s record of 164.7 bushels. Forecasted yields decreased from last month throughout much of the Cornbelt, Tennessee Valley, and Delta. Yields were up from August in the lower portions of the Southeast.
FCStone Group Inc. on Sept. 1 said U.S. corn production will total 13.195 billion bushels, down from the 13.42 million forecast offered by the research and brokerage firm in August. FCStone put soybean production at 3.39 billion bushels, down from its August forecast of 3.428 billion bushels.
On Sept. 9, one day before the report’s release, corn prices jumped to their highest level since October 2008 on speculation that USDA would lower its estimate from the August forecast of 13.365 billion bushels. Corn futures for December delivery rose 8.25 cents, or 1.8 percent, to close at $4.7075 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier on Sept. 9, the price reached $4.72, the highest level for the most-active contract since October 2008.
USDA’s soybean production estimate is for a record 3.48 billion bushels, up 1 percent from the August forecast of 3.433 billion bushels and 4 percent above last year. Based on Sept. 1 conditions, yields are expected to average a record high 44.7 bushels per acre, up 0.7 bushel from both last month and last year. The higher soybean projections surprised some analysts, who expected a decrease from August due to the same weather conditions that hampered corn.
Compared with last month, soybean yields are forecast higher or unchanged across the central and northern Cornbelt, with the exception of Michigan. The largest increases in yield from last month are expected in Maryland and Virginia, both up 4 bushels. With the exceptions of Louisiana and the Carolinas, yields are forecast down across the Delta States, Southern Great Plains, and Southeast.
The largest decline from the Aug. 1 forecast is expected in Oklahoma – down 7 bushels as drought conditions across much of the State hampered yield expectations, USDA said. If realized, the forecasted soybean yield in Illinois, Minnesota, Nebraska, New York, and North Dakota will be a record high. Area for harvest in the U.S. is forecast at 78.0 million acres, unchanged from June but up 2 percent from 2009.
All cotton production is forecast at 18.8 million 480-pound bales, up 2 percent from last month and up 55 percent from last year’s 12.2 million bales. Yield is expected to average 839 pounds per harvested acre, up 62 pounds from last year. Yields in the Delta region are expected to decrease from last month, while producers in Texas are expecting increased yields.