Department of Agriculture officials expect corn and soybean yields will average a record high this year despite lowering yield estimates from last month, and grain traders are watching to see if China keeps up ag purchases to support market prices.
Corn yields are now projected at 178.5 bushels per acre compared to last month’s projection of 181.8 bpa. This was almost right in line with the 178.8 bpa as trade expectation. However, USDA’s yield estimate is still 11.1 bushels higher than last year.
Soybean yield projections are 51.9 bpa, down 1.4 bushels from the previous forecast but up 4.5 bushels from 2019.
Don Roose, President of U.S.Commodities said the yield adjustments were expected, but the big question now is whether China continues to buy corn and soybeans to support market prices.
“Do the Chinese continue their buying ways at these higher prices on beans than they did at the lower prices? It’s the same thing (for) corn,” Roose told Agri-Pulse.
Corn ending stocks for the 2020/21 crop year are projected at 2.5 billion bushels. This number is 250 million bushels lower than the August projection of 2.75 billion bushels. New crop soybean ending stocks are projected at 460 million compared to 610 million bushels last month.
September soybean contracts were trading above $10 at midday. Allendale Inc. President Steve Georgy told Agri-Pulse for that to continue, traders need to be talking about an ending stocks figure less than 400 million.
“When you look at that on a fundamental scale, 400 million, as you get into the (300s) that’s telling you it equates to more than $10 soybeans,” Georgy said.
Corn production is projected at 14.9 billion bushels, according to the Crop Production report. This number is down 2% from the last forecast 9% higher than the 2019 harvest.
Officials are projecting soybean production at 4.31 billion bushels, which is down 3% from last month but up 21% from a year ago.
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Also included in the Crop Production report, National Agricultural Statistics Service staff noted they collected harvest acreage information for corn and soybeans in Iowa in areas that experienced a straight-line windstorm, known as a derecho, that took place August 10.
Based on the resurvey, NASS lowered corn harvested for grain area by 550,000 acres. Soybean acres were unchanged. Georgy thought the adjustment in Iowa had little if any impact on the market.
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