September 18, 2017
USDA REPORT INCREASES U.S. CROP YIELDS
The September 12 USDA Crop Report again surprised experts by increasing the projected 2017 U.S. corn and soybean yields, compared to the August 1 estimates a month earlier. The USDA yield estimates were based on U.S. crop conditions as of September 1st; however, the USDA projections do not agree with that analysis of U.S. crop conditions by many private crop and marketing analysts. Many of the private analysts cite delayed planting in the Eastern Corn Belt, drought conditions in portions of the Dakota’s, Nebraska, and the Western Corn Belt, and the cool August weather as reasons for concerns with 2017 yield levels.
The September 12 USDA Report projects the 2017 national average corn yield at 169.9 bushels per acre, which is an increase of 0.4 bushels per acre from the August estimate; however, this would be a decline of 4.7 bushels from the record U.S. average corn yield of 174.6 bushels per acre in 2016. The estimated 2017 U.S. corn yield would be the third highest ever, also trailing the average corn yield of 171.0 bushels per acre in 2014. Most private grain marketing analysts have been indicating an average estimated U.S. corn yield in a range of 166-168 bushels per acre. The estimated 2017 total U.S. corn production of 14.18 billion bushels, would be the third highest on record, trailing only the 2016 record U.S. corn production of 15.2 billion bushels and 14.2 billion bushels in 2014.
The USDA Report on September 12 estimated total 2017 U.S. soybean production at a record level of 4.43 billion bushels, which would exceed the previous record U.S. soybean production of 4.31 bushels in 2016. USDA left the estimated 2017 harvested soybean acreage at a record level of 88.7 million acres, which is up 7 percent from 82.7 million acres in 2016. USDA increased the projected the 2017 U.S. average soybean yield to 49.9 bushels per acre, which was an increase of .5 bushels per acre from the August 1st estimate. This also surprised many grain trading experts, who had projected the 2017 average soybean yield closer to a range of 47-48 bushels per acre. The estimated 2017 soybean yield still trails to the record national average soybean yield of 52.1 bushels per acre in 2016.
The September USDA Report lowered Minnesota’s 2017 corn yield estimate one bushel per acre from the August estimate to 182 bushels per acre, which trails the record State average corn yield of 193 bushels per acre in 2016, and 188 bushels per acre in 2015. Other 2017 USDA September corn yield projections, compared to the August estimates, include Iowa at 187 bushels per acre, down one bushel; Illinois at 189 bushels per acre, up one bushel; Indiana at 171 bushels per acre, down two bushels; Nebraska at 181 bushels per acre, down two bushels; South Dakota at 145 bushels per acre, up five bushels; and North Dakota at 124 bushels per acre, up 3 bushels. The rather large increased corn yield projections from August to September in the Dakota’s especially surprised some experts, given the drought conditions that have existed in both States throughout most of the 2017 growing season.
Minnesota’s 2017 average soybean yield is estimated at 47 bushels per acre, which is down 2 bushels per acre from the August estimate. Other 2017 State yield estimates are Iowa at 57 bushels per acre, up one bushel; Illinois at 58 bushels per acre, unchanged; Indiana at 56 bushels per acre, up one bushel; Nebraska at 56 bushels per acre, down two bushels; South Dakota at 45 bushels per acre, up four bushels; and North Dakota at 35 bushels per acre, up two bushels. Several Upper Midwestern States had record soybean yields n 2016, including in Minnesota at 52.5 bushels per acre, Iowa at 60.5 bushels per acre, South Dakota at 49.5 bushels per acre, and North Dakota at 41.5 bushels per acre.
SEPTEMBER 12 WASDE REPORT
The updated USDA World Supply and Demand Estimates (WASDE) released on September 12 included the projected increase in the 2017 U.S. corn yield, as well as a slight reduction in the estimated corn usage during the 2017-18 marketing year. The Report showed a slight increase in expected corn usage for feed, a decrease in corn used for ethanol, and no change in corn export levels in 2017-18, compared to 2016-17. The resulting projection in corn ending stocks for 2017-18 is 2.33 billion bushels, which is nearly the same as the estimated 2016-17 corn ending stocks of 2.35 billion bushels. The 2017-18 corn stocks-to-use ratio is now estimated at 16.4 percent, which would be at the highest level in over a decade.
USDA is projecting an average on-farm corn price for the 2017-18 marketing year, which runs from September 1, 2017, through August 31, 2018, in a range of $2.80 to $3.60 per bushel, with an average expected price of $3.20 per bushel. The September estimated average 2017-18 corn price is $.10 per bushel lower than the August price estimates. The 2016-17 national average corn price, which will be finalized on September 30, 2017, is still estimated at $3.35 per bushel, which compares to national average prices of $3.61 per bushel for 2015-15, $3.70 per bushel for 2014-15, and $4.45 per bushel for 2013-14.
The recent WASDE estimate is projecting 2017-18 soybean ending stocks at 475 million bushels, which would be at the highest level in decades, and would result in a stocks-to-use ratio of 11 percent. USDA is now projecting an average on-farm soybean price for the 2017-18 marketing year in a range of $8.35 to $10.05 per bushel, with an average expected price of $9.20 per bushel. The September soybean price estimate was lowered $.10 per bushel from the August estimate, and $.25 per bushel from the July estimate. The 2016-17 final national average soybean price estimate is unchanged at $9.50 per bushel, which compares to 12-month national average prices of $8.95 per bushel in 2015-16, $10.10 per bushel in 2014-15, and $13.00 per bushel for 2013-14.
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Note — For additional information contact Kent Thiesse, Farm Management Analyst and
Vice President, MinnStar Bank, Lake Crystal, MN. (Phone — (507) 381-7960);
E-mail — kent.thiesse@minnstarbank.com)