September 17, 2018
USDA REPORT SURPRISES EXPERTS
The September 12 USDA Crop Report surprised many experts by increasing the projected 2018 U.S. average corn yield, compared to the August 1 estimate 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 excess moisture and poor early season growing conditions in portions of Minnesota and Iowa, along with late season dry weather in southern portions of the Corn Belt, as reasons for concerns with the 2018 USDA corn yield projections.
The September 12 USDA Report projects the 2018 national average corn yield at 181.3 bushels per acre, which is an increase of 2.9 bushels per acre from the August estimate. If achieved, the 2018 U.S. corn yield would be a new record, surpassing the previous record corn yields of 176.6 bushels per acre in 2017 and 174.6 bushels per acre in 2016. Most private grain marketing analysts have been indicating an average estimated U.S. corn yield in a range of 176-179 bushels per acre. The estimated 2018 total U.S. corn production of just over 14.8 billion bushels, would be the second highest on record, trailing only the 2016 record U.S. corn production of 15.2 billion bushels. The 2017 production was near 14.6 billion bushels.
The USDA Report on September 12 estimated total 2018 U.S. soybean production at a record level of just over 4.69 billion bushels, which would exceed the previous record U.S. soybean production of 4.39 bushels in 2017. USDA left the estimated 2017 harvested soybean acreage at 88.9 million acres, which is slightly below the record U.S. soybean acreage of 89.5 million acres in 2017. USDA increased the projected the 2017 U.S. average soybean yield to the record level of 52.8 bushels per acre, which was an increase of 1.2 bushels per acre from the August 1st estimate. This was in-line with soybean yield estimates by grain trading experts. The estimated 2018 U.S. soybean yield compares to 49.1 bushels per acre in 2017, and the previous national record yield of 52 bushels per acre in 2016.
The September USDA Report listed Minnesota’s 2018 corn yield estimate at 191 bushels per acre, which in unchanged from the August estimate. The 2018 yield would be the third highest ever, trailing the record State average corn yield of 194 bushels per acre in 2017 and 193 bushels per acre in 2016. Other 2018 USDA September corn yield projections, compared to the August estimates, include Iowa at the record level of 206 bushels per acre, up four bushels; Illinois at 214 bushels per acre, up seven bushels; Indiana at 192 bushels per acre, up six bushels; Nebraska at 198 bushels per acre, up two bushels; South Dakota at 173 bushels per acre, up three bushels; and North Dakota at 142 bushels per acre, down 6 bushels. USDA is projecting record 2018 corn yields in 11 States, including Iowa, Illinois, Indiana, Nebraska, Ohio, South Dakota and Wisconsin.
Minnesota’s 2018 average soybean yield is estimated at 50 bushels per acre, which is up 1 bushel per acre from the August estimate. Other 2018 State yield projections, compared to August 1 estimates, are Iowa at 60 bushels per acre, up 1 bushel; Illinois at 66 bushels per acre, up 2 bushels; Indiana at 60 bushels per acre, up two bushels; Nebraska at 62 bushels per acre, up 1 bushel; South Dakota stayed steady at 49 bushels per acre; and North Dakota at 36 bushels per acre, down two bushels. USDA is projecting record soybean yields for 2018 in 10 States, including Iowa, Illinois, Indiana, Nebraska and Ohio.
SEPTEMBER 12 WASDE REPORT
The updated USDA World Supply and Demand Estimates (WASDE) released on September 12 included the projected increase in the 2018 U.S. corn yield. The report also showed slight increases in expected corn usage for feed and ethanol during 2018-19 marketing year, but a slight decrease in corn exports, compared to 2017-18 levels. Corn ending stocks for 2018-19 are now projected at 1.77 billion bushels, which is down from just over 2 billion bushels in 2017-18 and a decline from nearly 2.3 billion bushels in 2016-17. The 2017-18 corn stocks-to-use ratio is now estimated at 11.7 percent, which would be down considerably from the previous two years.
USDA is projecting an average on-farm corn price for the 2018-19 marketing year, which runs from September 1, 2018, through August 31, 2019, in a range of $3.00 to $4.00 per bushel, with an average expected price of $3.50 per bushel. The September estimated average 2018-19 corn price is $.10 per bushel lower than the August price estimates. The 2017-18 national average corn price, which will be finalized on September 30, 2018, is estimated at $3.35 per bushel, which compares to national average prices of $3.36 per bushel for 2016-17, $3.61 per bushel for 2015-16, $3.70 per bushel for 2014-15. and $4.45 per bushel for 2013-14.
The recent WASDE estimate is projecting 2018-19 soybean ending stocks at 845 million bushels, which would be at the highest level in decades, and would be more than double the estimated 2017-18 ending stocks of 395 million bushels. Soybean crush levels for 2018-19 are projected to increase slightly, but soybean export levels are expected to decline by 70 million bushels, compared to 2017-18 levels. The projected level of soybean carryover would result in an estimated stocks-to-use ratio of nearly 20 percent, which is quite high.
USDA is now projecting an average on-farm soybean price for the 2018-19 marketing year in a range of $7.35 to $9.85 per bushel, with an average expected price of $8.60 per bushel. The September soybean price estimate was lowered $.30 per bushel from the August estimate. The 2017-18 final national average soybean price estimate is unchanged at $9.35 per bushel, which compares to national average prices of $9.47 per bushel for 2016-17, $8.95 per bushel in 2015-16, $10.10 per bushel in 2014-15, and $13.00 per bushel for 2013-14.
**********************************************************************************
Note — For additional information contact Kent Thiesse, Farm Management Analyst and Senior
Vice President, MinnStar Bank, Lake Crystal, MN. (Phone — (507) 381-7960);
E-mail — kent.thiesse@minnstarbank.com)