As many grain marketing experts expected, USDA lowered the projected corn U.S. average yield for the 2019 crop year, based on the USDA Crop Production Report released on November 8. USDA decreased the expected 2019 national average corn yield by 1.4 bushels per acre and decreased the total 2018 U.S corn production by 118 million, compared to October USDA estimates. The estimated national average soybean yield and the total 2019 soybean production level in the November USDA Report were kept the same as the October levels.

The latest USDA Report estimated the total U.S. corn production for 2019 at 13.66 billion bushels, which is below the production levels of 14.42 billion bushels in 2018, 14.6 billion bushels in 2017, and the 2016 record U.S. corn production of 15.15 billion bushels. The projected 2019 corn production would be similar to the production level of 13.6 billion bushels in 2015. USDA is estimating the 2019 national average corn yield at 167 bushels per acre, which would be lowest national average corn yield in the past six years. The estimated 2019 U.S. corn yield compares to 176.4 bushels per acre in 2018, the record yield of 176.6 bushels per acre in 2017, 174.6 bushels per acre in 2016, 168.4 in 2015, and 171 in 2014. The projected 2019 U.S. harvested corn acreage is 81.8 million acres, which is very similar to the 81.7 million acres that were harvested last year.

The USDA Report estimated 2019 U.S. soybean production at 3.55 billion bushels, which is down significantly from over 4.4 billion bushels in both 2018 and 2017, as well as 4.3 billion bushels in 2016. USDA is estimating a U.S. soybean yield in 2019 at 46.9 bushels per acre, which compares to 50.6 bushels per acre in 2018, the record U.S. soybean yield of 52.0 bushels per acre in 2016, 49.3 bushels per acre in 2017 and 48 bushels per acre in 2015. The 2019 harvested soybean acreage is projected at 75.6 million acres, which is down from 87.6 million acres in 2018.

Based on the November Report, Minnesota is projected to have a 2019 corn yield of 170 bushels per acre, which was lowered 3 bushels from the October estimate and is 12 bushels per acre below the 2018 corn yield of 182 bushels per acre. The 2019 State estimate also compares to the record State corn yield of 194 bushels per acre in 2017, 193 bushels per acre in 2016, and 188 bushels per acre in 2015. USDA is estimating the 2019 Iowa corn yield at 192 bushels per acre, which is the same as the October estimate, and compares to 196 bushels per acre in 2018, 202 bushels per acre in 2017 and the State record yield of 203 bushels per acre in 2016.

Other estimates for 2019 average corn yields are Illinois at 179 bushels per acre, compared to 210 bushels per acre in 2018, Indiana at 165 bushels per acre, compared to 189 bushels per acre in 2018, Nebraska at 182 bushels per acre, compared to 192 bushels per acre in 2018, South Dakota at 151 bushels per acre, compared to 160 bushels per acre in 2018 and North Dakota at 142 bushels per acre, compared to 153 bushels per acre in 2018. Missouri was the only Midwestern State with a higher projected corn yield for 2019, compared to 2018.

USDA is estimating the 2019 Minnesota soybean yield at 45 bushels per acre, compared to 49 bushels per acre in 2018, 47.5 bushels per acre in 2017, and the record State yield of 52 bushels per acre in 2016. The 2019 Iowa soybean yield is estimated at 53 bushels per acre, compared to 56 bushels per acre in 2018, 57 bushels per acre in 2017 and the 2016 record yield of 60 bushels per acre. Other projected State soybean yields for 2019 are Illinois at 51 bushels per acre, compared to 63.5 bushels per acre in 2018, Indiana at 49 bushels per acre, compared to 57.5 bushels per acre in 2018, Nebraska at 57 bushels per acre, compared to 58 bushels per acre in 2018, South Dakota at 43 bushels per acre, compared to 45 bushels per acre in 2018, and in North Dakota at 33 bushels per acre, compared to 35 bushels per acre in 2018.

USDA SUPPLY AND DEMAND REPORT

The monthly USDA World Supply and Demand Estimates (WASDE) Report was also released on November 8, which may impact corn and soybean markets in the coming months. The WASDE Report showed a lower overall 2019-20 U.S. corn supply estimates than existed in 2018-19, as well as a slight decrease in total corn demand levels for the coming year, which resulted in a reduction in the projected corn carryout levels by the end of the 2019-20 marketing year. Total demand for corn usage in 2019-20 was lowered by 559 million bushels from 2018-19 levels, due to an expected reduction in the amount of corn used for livestock feed and a decrease in corn export levels for the coming year. Corn used for ethanol production was projected to remain similar to a year earlier.

USDA is now estimating 2019-2020 U.S. corn ending stocks at 1.91 billion bushels, which compares to carryout levels of 2.11 billion bushels in 2018-19, 2.14 billion bushels in 2017-18 and 2.29 billion bushels in 2016-17. Interestingly, USDA projected a market-friendly corn carryout level of 1.74 bushels for 2018-19 a year ago in November and the carryout level ended the marketing year at 2.11 billion bushels. The U.S. corn carryout to use ratio would be at 13.7 percent for 2019-20, which compares to 14.6 percent for 2018-19, 14.5 percent in 2017-18 and 15.7 percent in 2016-17. This means there could be some potential for short-term rallies in the cash corn market in the coming months, especially if USDA makes further downward adjustments in the final 2019 U.S. average corn yield.

The 2019-20 U.S. soybean ending stocks in the WASDE Report were estimated at 475 million bushels, which is down significantly from the 2018-19 ending stocks of 913 million bushels. The projected soybean ending stocks for he coming year are more similar to the carryout level of 438 million bushels for 2017-18; however, they are still considerably higher than the ending stock levels of 302 million bushels in 2016-17 and 197 million bushels for 2015-16. The soybean carryout-to-use ratio for 2019-20 is estimated at 11.5 percent, which is down considerably from 23 percent for 2018-19. Soybean demand for 2019-20 is projected to increase slightly compared to a year earlier, primarily due to a small increase in the expected soybean export level. The expected large decrease in soybean ending stocks may offer some opportunities for farm-level soybean prices in the coming months, especially if there is some resolution to the China trade situation.

USDA is currently estimating the U.S average on-farm cash corn price for 2019-2020 at an average of $3.85 per bushel, which was an increase of $.05 per bushel from the October estimate. The 2019-20 USDA price estimates are the expected average farm-level prices for the 2019 crop from September 1, 2019 to August 31, 2020; however, they do not represent estimated prices for either the 2019 or 2020 calendar year. The projected USDA average corn price of $3.85 per bushel for 2019-2020 compares to national average corn prices of $3.61 per bushel for 2018-19, $3.36 per bushel for both 2017-18 and 2016-17, and $3.61 per bushel for 2015-16.

USDA is projecting the U.S. average farm-level soybean price for the 2019-2020 marketing year at $9.00 per bushel, which is the same as the October estimate. The 2019-20 soybean price estimate of $9.00 per bushel compares to $8.48 per bushel for 2018-19, $9.35 per bushel for 2017-18, and $9.47 per bushel in 2016-17.

******************************************************************************************

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) Web Site — http://www.minnstarbank.com/