American farmers are going to be producing more corn and soybeans than expected this year, which will also mean lower expected prices for the crops, according to a new USDA forecast that boosted the department’s yield predictions.
The USDA, using new data from farmers, bumped its corn yield prediction up to 176.3 bushels per acre. That’s 1.7 bushels per acre more than USDA predicted last month in its World Agricultural Supply and Demand Estimates report and about half a bushel more than traders were generally expecting, according to Ben Brown, a senior research associate at the University of Missouri’s Food and Agricultural Policy Research Institute.
Minnesota, Iowa, Wisconsin and Michigan had some of the biggest corn yield increases in the September report, said Brown.
“With yield increasing and acreage increasing, we saw the production for U.S. corn for the current year increase 246 million bushels,” Brown said.
The new USDA corn production forecast is 14.996 billion bushels, up from the August forecast of 14.75 billion bushels.
USDA also bumped up its predictions for corn exports and feed use, but that wasn’t enough to keep the department’s economists from also increasing ending stocks.
USDA new total corn-usage estimate is now 14.8 billion bushels – 150 million bushels more than the previous forecast. That includes a 75-million-bushel increase for exports.
Corn ending stocks for the 2021-22 marketing year are now expected to total 1.408 billion bushels – a 166-million-bushel increase from a month ago.
USDA lowered its estimate for the average farm price for corn to $5.45 per bushel, down from the WASDE August prediction of $5.75.
As for soybeans, the USDA’s production forecast did not get as big of a bump. While USDA did raise its yield estimate, it also cut acreage.
USDA’s new forecast for U.S. soybean production is 4.374 billion bushels, an increase of 35 million bushels. That incorporates the new higher yield of 50.6 bushels per acre – up from 50 bushels per acre in the August WASDE. It’s also based on a new harvested-acreage forecast, which USDA lowered to 86.4 million, down from 86.7 million.
The new higher soybean production forecast “was met with some mixed reviews on the demand side,” Brown said. “The crush was lowered 25 million bushels … while exports were increased 30 million bushels – so almost offsetting. Total demand for the current year increased 10 million bushels of soybeans and then we had ending stocks increase 30 million bushels.”
For soybeans, there was an even bigger move than corn in USDA’s price expectations. USDA lowered its average farm price for soybeans by 80 cents per bushel to $12.90.
With a larger-than-expected crop and lower-than-expected prices, USDA said it expects exports to be stronger for the 2021-22 marketing year. USDA raised its forecast to 2.09 billion bushels, up 35 million bushels from its August prediction.
The ending stocks prediction is now set at 185 million bushels, up from 155 million bushels in last month’s WASDE and 175 million bushels for the 2020-21 marketing year.
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