Market analysts expected corn and soybean yields to be down slightly prior to the release of The World Agricultural Supply and Demand Estimates (WASDE) report Sept.12. However, opposite to market expectations, corn yield estimate was up while the decreased soybean yields met market expectations, explained Lisa Elliott, SDSU Extension Commodity Marketing Specialist in a recent market summary.
Read Elliott's detailed market summary below.
Corn
Prior to the report, market analysts expected U.S. corn yield to be at 153.9 bushels per acre. This would be 0.5 bushels per acre lower than the USDA's August estimate. In the report, corn yield was increased by 0.9 bushels to 155.3 bushels per acre. The increase in yield meant the corn production estimate increased by 80 million bushels to a total 13.8 billion bushels.
This relies on 89 million acres expected to be harvested. However, supply only increased by 18 million bushels to 13.8 billion bushels because 2012/2013 corn ending stocks were lowered by 58 million bushels to 661 million bushels due to expected increased demand in the 2012-2013 marketing year.
Market participants expected 2013-2014 corn ending stocks at 1.74 billion bushels, a decrease of 98 million bushels. The report revealed 2013-2014 corn ending stocks at 1.86 billion bushels, an increase of 18 million bushels from the August report.
The increase in supply was carried to ending stocks, as demand factors were left unchanged. This projected ending stocks level would be 626 million bushels higher than the 1.2 billion bushel five year average.
USDA-NASS objective yield and producer surveys were utilized to forecast state yields. They reported that the Sept. 1 corn yield data revealed that the number of ears for the ten combined objective yield survey states was the highest on record.
For this region (Iowa, Minnesota, Nebraska, North Dakota, and South Dakota), the individual state yield adjustments have increased the forecasted production by 35 million bushels to 6.32 billion bushels based upon the states' expected harvested acres.
The expected drop in production, because of yield decreases in Iowa and North Dakota, were almost offset by the production increase projected for Nebraska due to a yield increase.
South Dakota projected increase in production due to a yield increase was slightly over the projected increase for the region.
Highest yields since 2009
If the U.S. realizes 155.3 corn bushels per acre, this would be the highest average yield since 2009. From a historical perspective (1981-2012), the reliability of the September USDA projected corn production forecast has had an average difference from the final estimate of 311 million bushels.
The USDA lowered the farm average price by 10 cents to $4.80 per bushel from the August report.
Soybeans
Prior to the report, market analysts expected U.S. soybean yield to be at 41.2 bushels per acre, or 1.4 bushels lower than the USDA's August estimate. In the report, soybean yield was decreased 1.4 bushels to 41.2 bushels per acre.
The U.S. soybean production estimate was deceased by 106 million bushels to 3.15 billion bushels. From a historical perspective (1981-2012), the reliability of September USDA projected soybean production forecast has had an average difference from the final estimate of 118 million bushels.
Soybean demand was decreased slightly with crush and exports being decreased by 20 and 15 million bushels, respectively. Market participants expected 2013-2014 soybean ending stocks at 165 million bushels which is a 55 million bushel decrease. The report revealed 2013-2014 soybean ending stocks at 150 million bushels, a decrease of 70 million bushels from the August report. This would put ending stocks close to the five year average.
The USDA raised the farm average price by $1.15 to $12.50 per bushel from the August report. Soybean meal price was increased by 17 percent to an average price of $380 per short ton.
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