USDA report lowers expected yields

By Kent Thiesse

Projected 2019 crop yields for corn and soybeans are down according to the latest USDA report, but some private analysts don’t think it’s low enough.

The September 12 USDA Crop Report slightly lowered projected yields based on field conditions on Sep. 1. Many of the private analysts, however, think it should be lower, citing excess moisture and poor early season growing conditions in portions of southwest Minnesota, South Dakota, and a large portion of the eastern Corn Belt.  

The 2019 national average corn yield will be 168.2 bushels per acre, according to the USDA report, a decrease of only 1.3 bushels per acre. This would be well below 2018’s 176.4 bushels per acre and the record of 176.6 bushels per acre set in 2017. 

Private grain marketing analysts have been predicting the average U.S. corn yield to be near 166-167 bushels per acre. Interestingly in 2018, USDA overestimated corn yield by about 5 bushels per acre. Total U.S. corn production for 2019 is estimated at 13.8 billion bushels, compared to 14.4 billion bushels in 2018.

Estimated USDA soybean production is just over 3.63 billion bushels, a 20 percent reduction from 2018’s 4.54 billion bushels (47.9 bushels per acre from 48.5 bushels per acre in August). That projection is just slightly above the yield estimates by grain trading analysts.  

USDA is estimating Minnesota’s 2019 average corn yield at 171 bushels per acre, down from last year’s 182 bushels per acre and 2017’s record of 194 bushels per acre in 2017. Other surrounding states’ 2019 corn projections are:

  • Iowa at 191 bushel per acre (196 bushels per acre in 2018)
  • South Dakota at 156 bushels per acre (160 bushels per acre in 2018)
  • North Dakota at 145 bushels per acre (153 bushels per acre in 2018)
  • Wisconsin at 163 bushels per acre (172 bushels per acre in 2018)  

USDA is projecting Minnesota’s 2019 average soybean yield at 45 bushels per acre, down from 50.5 bushels per acre in 2018 and the record 52.5 bushels per acre set in 2016. Other surrounding states’ 2019 soybean projections are:

  • Iowa at 54 bushels per acre (57 bushels per acre in 2018)
  • South Dakota at 44 bushels per acre (46 bushels per acre in 2018)
  • North Dakota at 35 bushels per acre (35.5 bushels per acre in 2018)
  • Wisconsin at 47 bushels per acre (49 bushels per acre in 2018)

Total 2019 harvested soybean acres in Minnesota and the Dakotas is estimated at 15.9 million acres, down considerably from over 20 million acres in 2018.

 

September 12 WASDE report

Besides projected decreases in corn yield and production, the updated USDA World Supply and Demand Estimates released on September 12 also showed a slight increase in expected corn usage for ethanol during 2019-20 marketing year, but a slight decrease in corn used for feed and in corn exports, compared to 2018-19 levels. 

Corn ending stocks for 2019-20 are now projected at 2.19 billion bushels, down from over 2.4 billion bushels in 2018-19. USDA projected that at just under 1.8 billion bushels a year ago. The 2019-20 corn stocks-to-use ratio is now estimated at 15.5 percent, which would be down slightly from the previous two years.

USDA is projecting the average on-farm corn price for the 2019-20 marketing year, to be near $3.60 per bushel,  flat from August. The 2018-19 national average corn price, which will be finalized on September 30, is also estimated at $3.60 per bushel. That was $3.36 per bushel for both 2017-18 and 2016-17, $3.61 per bushel for 2015-16, and $3.70 per bushel for 2014-15. 

Projected 2019-20 soybean ending stocks are at 640 million bushels, a decline of 115 million bushels from the August estimate. That would be a 36 percent decline from the estimated 2018-19 ending stocks of just over 1 billion bushels; however, the 2019-20 level would still be well above the 2017-18 ending stocks of 395 million bushels. 

Both soybean crush bushels and soybeans for export in 2019-20 are projected to increase slightly compared to a year earlier; however, total soybean demand for 2019-20 is only expected to increase by 24 million bushels. The projected reduced level of soybean carryover would result in an estimated stocks-to-use ratio of just over 15 percent, down significantly from near 25 percent for the 2018-19 marketing year. 

USDA is now projecting the average on-farm soybean price for the 2019-20 marketing year to be near $8.40 per bushel. Even though the September soybean ending stocks numbers were somewhat positive, the September price estimate stayed the same as the August national average estimate of $8.40 per bushel. The 2018-19 final national average soybean price estimate is $8.50 per bushel, which compares to national average prices of $9.33 for 2017-18, of $9.47 per bushel for 2016-17, $8.95 per bushel in 2015-16, and $10.10 per bushel in 2014-15. 

For additional information email Kent Thiesse, Farm Management Analyst and Senior Vice President, MinnStar Bank, Lake Crystal at kent.thiesse@minnstarbank.com.  
 
To subscribe to BankWise for weekly Ag Lending News updates email Kristi Ploeger or call 651-789-3997. 

Download, print, and display ICBM’s Farm and Rural Helpline Flyer.

7900 International Drive, Suite 685,

Bloomington, MN 55425

Phone: 651.687.9080

Fax: 651.687.9387

info@icbm.org

© 2018 ICBM. All Rights Reserved.

A proud state affiliate of the