By Kent Thiesse
A very bearish August USDA report has dropped the December corn futures price by 50 cents per bushel in the December corn futures price from the August 9 price.
Large chunks of the Corn Belt had very late planting dates and challenging conditions. More favorable recent conditions in some areas, however, have increased 2019 yield expectations.
The August 12 USDA Crop Report estimated the 2019 total U.S. corn production at 13.9 billion bushels, which would be a decrease of 4 percent from 2018. That’s down from 14.4 billion bushels in both 2018 and 2017, the record U.S. corn production of 15.2 billion bushels in 2016, and 14.2 billion bushels in 2014. USDA is estimating 2019 total harvested corn acreage in the U.S. at 82 million acres, which is down 1.6 million acres from the July estimate, and compares to 81.7 million harvested corn acres in 2018.
The latest crop report projects the national average corn yield in 2019 at 169.5 bushels per acre, which surprisingly was an increase from the July USDA estimate of 166 bushels per acre. Many private grain marketing analysts are questioning the USDA corn yield increase in the August report, considering the growing season struggles in the eastern Corn Belt and the fact that weekly USDA crop progress reports have not shown significant improvement in the corn crop ratings.
USDA is estimating Minnesota’s 2019 average corn yield at 173 bushels per acre, which is well below the 2018 yield of 182 bushels per acre and record state average corn yield of 194 bushels per acre in 2017.
USDA is now projecting Iowa’s 2019 average corn yield at 191 bushel per acre, which is also
below the average yield of 196 bushels per acre in 2018. South Dakota’s 2019 corn yield is estimated at 157 bushels per acre, compared to 160 bushels per acre in 2018; North Dakota at 146 bushels per acre, compared to 153 bushels per acre in 2018; and Wisconsin at 165 bushels per acre, compared to 172 bushels per acre in 2018.
The USDA Report on August 12 estimated total 2019 U.S. soybean production at 3.68 billion bushels, a decrease of 19 percent from the record 2018 production level of 4.54 billion bushels. USDA is now estimating total 2019 harvested soybean acreage at 75.9 million acres, down from 88.1 million acres in 2018 and 89.5 million acres in 2017.
USDA is projecting the 2019 U.S. average soybean yield at 48.5 bushels per acre, unchanged from the July estimate. Minnesota’s 2019 average soybean yield is estimated at 45 bushels per acre, which compares to 48 bushels per acre in 2018. Iowa is projected to have a 2019 soybean yield of 55 bushels per acre in 2018, compared to 57 bushels per acre in 2018.
South Dakota is projected to have a 2019 soybean yield of 45 bushels per acre, compared to 46 bushels per acre in 2018; with North Dakota at 35 bushels per acre, compared to 35.5 bushels per acre in 2018; and Wisconsin at 47 bushels per acre, compared 49 bushels per acre in 2018. Total 2019 harvested soybean acres in Minnesota, North and South Dakota is estimated at 15.9 million acres, which is down considerably from over 20 million acres in 2018.
On August 12, the USDA Farm Service Agency also released the initial listing of 2019 prevented planted acres, totaling over 19 million acres, which has created numerous questions regarding actual 2019 total planted acres of corn and soybeans that were used in the USDA crop report.
August 12 WASDE report
The updated USDA World Supply and Demand Estimates were also released on August 12. This report included the 2019 estimated U.S. corn production of 13.9 billion bushels, with an increase in the 2019-20 corn ending stocks compared to the July estimate. The 2019-20 corn ending stocks are now estimated at nearly 2.2 billion bushels, compared to the projected 2018-19 corn ending stocks of 2.36 billion bushels.
The report showed a slight decrease in expected corn usage for ethanol production 2019-20, while projecting a more significant decrease in corn exports for 2019-20 marketing year. The higher projected corn ending stocks for both 2018-19 and 2019-20 reverses the trends from earlier this year, which indicated tighter ending stocks in the coming months.
USDA is projecting an average on-farm corn price for the 2019-20 marketing year, which runs from September 1, 2019, through August 31, 2020, at $3.60 per bushel, a decline from the $3.70 per bushel estimate in July. The 2018-19 national average corn price, which will be finalized on September 30, 2019, is now estimated at $3.60 per bushel, which compares to national average prices of $3.36 per bushel in both 2017-18 and 2016-17, and $3.61 per bushel for 2015-16.
The recent WASDE estimates are projecting a 2019 U.S. soybean production of 3.68 billion bushels in 2019. USDA lowered the estimated export levels from the July estimates and left the 2019-20 soybean crush levels unchanged. This would result in estimated 2019-20 soybean ending stocks at 755 million bushels, which would be a significant decline from the projected ending stocks of 1.07 billion bushels for 2018-19; however, it is still well above the 2017-18 soybean ending stocks at 430 million bushels.
USDA is now projecting an average on-farm soybean price for the 2019-20 marketing year at $8.40 per bushel, which is unchanged from the July estimate. The 2018-19 final national average soybean price is estimated at $8.50 per bushel, which compares to 12-month national average prices of $9.33 in 2017-18, $9.47 per bushel in 2016-17, and $8.95 per bushel in 2015-16.
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