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August 12, 2009
USDA's August 1 Crop Report
The most anticipated crop report of the production year was released earlier today by USDA’s National Agricultural Statistics Service, which forecast the second largest corn crop and fourth soybean crop on record. But USDA also said the Cornbelt was not going to produce as much as would be expected.
USDA’s first objective yield estimate, in which statisticians took field surveys, found 5% more corn than last year and 8% more soybeans compared to 2008. But USDA also said corn “Yield prospects are lower in the central Corn Belt where excessive spring moisture delayed planting and below normal temperatures slowed corn emergence and development.” Regarding soybeans, USDA said, “With the exception of Illinois, yields are forecast higher or unchanged from last year across the Corn Belt and Great Plains.” And UDSA also said ear counts were unusually high in most states, “The August 1 corn objective yield data indicate a record high number of ears per acre for the combined 10 objective yield States (Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin). Record high ear counts are forecast in all objective yield States except Illinois, Missouri, and Wisconsin.”
USDA also expressed its concern about the delay of the corn crop, particularly in Illinois, “Double-digit silking progress was evident mid-month throughout much of the Corn Belt; however, large phenological delays remained in Illinois and Indiana. In Illinois, the second largest corn-producing State, silking was 2 weeks behind the normal pace on August 2. Seven percent of this year’s corn crop was at or beyond the dough stage on July 26 and had reached 14 percent complete by August 2, slightly behind last year and 15 points behind the 5-year average. Doughing had yet to begin in Minnesota and North Dakota, leaving progress over 1 week behind normal in both States. Overall, the condition of the corn crop declined 3 points during July, with 68 percent rated good to excellent on August 2.”
Based on the corn yield and production estimates of 12.761 billion bushels, USDA revised its consumption forecasts. With the upward bump of 471 million bushels of corn from the July estimate, USDA pushed feed demand up 100 million bushels to 5.300 billion, pushed up ethanol demand by 100 million bushels to 4.200 billion, and pushed up exports 150 million to 2.150 billion bushels. The carryout was raised from 1.550 billion in July to 1.621 billion at the end of August 2010. USDA revised the national average price range down by 25¢, and reset the range to be $$3.10 to $3.90 per bushel.
Compared to the USDA report, a survey of commodity traders indicated they had been expecting a 12.554 billion bushel corn crop (in a range of 12.3 to 12.8 billion), with a national average yield of 157.1 bushels per acre. The market had also expected the new crop corn carryout to be 1.697 billion bushels.
The August report comes just two days before Friday’s deadline for signing up for the ACRE program, and many farmers had awaited the report’s estimate of state production to help determine their strategy, whether or not to sign up their 2009 crop into the irrevocable ACRE program. USDA’s Cornbelt state estimates for corn yields were:
Illinois: 175 bu.
Indiana: 163 bu.
Iowa: 185 bu.
Kansas: 143 bu.
Michigan: 140 bu.
Minnesota: 167 bu.
Missouri: 146 bu.
Nebraska: 166 bu.
North Dakota: 118 bu.
Ohio: 165 bu.
South Dakota: 141 bu.
Wisconsin: 135 bu.
Based on the soybean yield and production estimates of 3.199 billion bushels, USDA revised its consumption forecasts. With production being lowered from the July estimate of 3.260 billion to 3.199 billion bushels, USDA nudged the crush down 10 million bushels to 1.670 billion bushels, and also pushed exports down 10 million bushels to 1.265 billion bushels. The August 2010 carryout was estimated at 210 million bushels, down from the 250 million forecast in July. USDA revised the national average price range up by 10¢, and reset the range to be $8.40 to $10.40 per bushel.
The market had been expecting a 3.213 billion bushel soybean crop (in a range of 3.0 to 3.3 billion) with an average yield of 42.1 bushels per acre. New crop ending stocks in August of 2010 were expected by the market to be 212 million bushels.
USDA’s Cornbelt state estimates for soybean yields were:
Illinois: 44 bu.
Indiana: 45 bu.
Iowa: 52 bu.
Kansas: 38 bu.
Michigan: 37 bu.
Minnesota: 40 bu.
Missouri: 40 bu.
Nebraska: 49 bu.
North Dakota: 29 bu.
Ohio: 47 bu.
South Dakota: 37 bu.
Wisconsin: 39 bu.
USDA also revised the soybean acreage in many Cornbelt states based on planting difficulties when the June 30th report was being prepared. The latest estimates are:
Illinois: 9.100 million.
Indiana: 5.500 million
Iowa: 9.800 million
Kansas: 3.600 million.
Michigan: 2.000 million.
Minnesota: 7.200 million
Missouri: 5.400 million
Nebraska: 4.700 million
North Dakota: 4.050 million
Ohio: 4.600 million
South Dakota: 4.350 million
Wisconsin: 1.640 million
Total US acres for soybeans were reset to 77.723 million, up slightly from the June estimate.
Summary:
The August 1 Crop Report from USDA forecast corn production at 12.8 billion bushels, 2% under the 2007 record crop, partially from poorer yield expectations in the Eastern Cornbelt. The national average corn yield was project at 159.5 bushels per acre. Soybean production would be the fourth highest at 3.20 billion bushels, with a 41.7 bushel per acre average. USDA also revised the soybean acreage up slightly from June.
Posted by Stu Ellis at August 12, 2009 8:21 AM | Permalink
Comments
“Snooping” up a guess; after the fact (August 12, 2009 Report)
There appears to be a weak correlation between percent pod set in the first week of August and final yield for soybeans in the states on Illinois, Indiana, Iowa, Michigan, Minnesota and North Dakota. The pod set adjustment with crop condition values place a US soybean guess yield at 41.4 bu. /a. (aphid year of 2003 was not included) close to USDA’s yield of 41.7 bu. / a. (August 12, 2009 report). The top five states where guess total production (USDA’s August 12 harvested acres were used in the calculation of total production) is higher than USDA’s include IL (47.0 bu. /a.), NE (51.7 bu./a. ), MO (41.9 bu./a), KY (45.1 bu./a) & OH (48.5 bu./a ). The bottom five states where guess total production is lower than USDA include ND (bean yields in the teens), IA (50.3 bu. /a), MI (34.0 bu. /a), AR (36.3 bu. /a) & NC (29.3 bu. /a).
Most soybean varieties’ development is triggered by the length of night; however heat is needed for plant physiological development (run the chemical reaction of the plant). Late planting and “cool” temperatures have resulted in soybeans being “late” in development. Should the longer nights “shut down” (bring the plant to maturity) the soybean crop prior to the completion of the physiological processes, small and/or green beans may be the result; reducing yield. This is the “bullish”, “fear mongering” argument for soybean and may be what the “snooped” correlation between percent pod set and yield is indicating. It should be noted that prior late pod set years did not have as good of a crop condition rating as the current crop. This factor along with many others; known and unknown, may make this projection useless. Irwin’s, Good’s and Tannura’s yield estimates should receive a much heavier weighting than the “snooped data” above; just wanted to share the other side of yield projections.
A reduction in US soybean yield below something like 40.4 bushels per acre, with current harvested acres, would result in another “tight” balance sheet and “high” prices for soybeans and next year’s corn. This appears unlike unless a major insect, disease and/or very early frost occurs.
Steve Koenig from Progressive Marketing, as reported August 14, 2009 by Ken Anderson on Brownfield Ag News, appears to have some good advice. He expects a freeze price rally this year. He states; ‘I think the biggest thing guys need to look at is what their bin space looks like as they go into this fall. Talk to their agronomist; talk to whomever-get a good estimate of what they think they’re going to have for production. And then take this freeze rally-because we will have one and there will be enough concern this year-take the freeze rally to sell those bushels they can’t put in a bin.’ Even if a freeze rally does not occur this may be a good practice in preparation for harvest.
Posted by: Freeport, IL at August 18, 2009 1:04 PM
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