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Narrow trading range for U.S. corn and soybean yields increases surprise risk – Brown


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NAPERVILLE — Grain analysts almost always underestimate the U.S. government’s September corn and soybean yields, and a lack of variety in this year’s estimates could keep that streak alive.

Various crop reports add an extra level of excitement this year, as does an early acreage survey from the USDA’s statistical service.

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The market is confident that the next USDA corn yield forecast will be noticeably lighter than last month, following significant hot and dry weather in the western Corn Belt. However, soybeans are not expected to be badly affected.

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Analysts on average peg the U.S. corn yield at 172.5 bushels per acre, a historically large 1.7% decline from the USDA’s August forecast. A similar decline occurred in September 2020 after a storm damaged crops in Iowa, but the largest August-September decline occurred in 2011, another year with bad weather.

Commercial corn yields will come in above 171.4 bushels in 2020, but this will be the worst yield since 2012, given the deviation from the long-term trend.

Soybean yield in the US is estimated at 51.5 b.a. ahead of the USDA’s report on Monday, below the forecast of 51.9 in August and slightly above last year’s 51.4. A yield of 51.9 bps would have tied the 2016 record, but the increase in trend yields since then would make that same result less impressive this year.

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However, soybean yields of 51.5 would be slightly above trend, significantly different from corn ideas. On a percentage basis, this would be the smallest difference between September and August soybean yields since 2015 and the third smallest difference in a quarter century.


The USDA’s September corn and soybean yields fell below monthly average trade forecasts only once in the past decade, but in different years (2015 for corn and 2012 for soybeans).

For the first time since 2019, field measurements were reflected in the USDA’s September forecast instead of August, but analysts still underestimated corn and soybean yields for three Septembers.

Additionally, USDA’s September corn yield was outside the marketable range only twice in the past 18 years (2005, 2018), and four times for soybeans (2004, 2010, 2016, 2017).

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This month’s yield estimates could confirm another range breach, with corn covering just 4.3 bps, the third lowest in 18 years. Soybean’s yield range of 1.3 bpa is also the third-lowest in 18 years, but percentage-wise, both are the lightest or among the lightest.

The 50.7 to 52 bpa range on soybeans gives a little room for yield gains, but it doesn’t account for that in corn. The top corn estimate of 174.9 bushels for the year is half a bushel below the August yield.

Trade confidence in the decline in corn yields last month, as well as the large size, may be justified given that crop conditions are the worst to date since 2012. But these statistics were very close to reality in early August.

The lowest corn yield in the survey at 170.6 bass per year avoids recent bids below 170, but something this low could tip the balance. Nine out of 19 analysts polled call for U.S. corn ending stocks for 2022-2023 to fall below 1.2 billion bushels. This compares with the 1.388 billion forecast in August.

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The U.S. Department of Agriculture’s statistics service said Tuesday it would look at corn, soybeans and other U.S. acreage in this month’s update instead of the usual October deadline because its data was complete enough to do so.

The same thing happened in 2021, but the announcement came on September 1 of last year, before analysts presented production estimates in September. This year’s timing was less than ideal.

Reuters had already compiled many estimates, including on harvested acres, by the time NASS made the announcement on Tuesday. Participating analysts were given the opportunity to revise any estimates in light of new information, although only a couple chose to do so.

However, last-minute nature introduces the possibility that area or yield assumptions may have been different given prior knowledge of area surveys.

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Seven of 18 analysts polled by Reuters on U.S. production suggested a different corn-harvested area than the USDA’s August figure, with only one calling for an increase.

Eight of the 18 harvested soybean acreage estimates differed from the USDA’s August figures, with six of them higher. Businesses have been eager to confirm an increase in soybean acres since June’s shockingly low numbers, but that has yet to happen.

Both planted and harvested acres of corn and soybeans in August were down slightly from June following USDA’s July resurvey of Northwest Corn Belt states.

Final corn planted area in 2021 was higher than in June for the first time since 2012, but last year’s harvested corn area was higher than the June forecast for the first time since 2016. Final soybean crops were higher than June only twice in the last 13 years (2017, 2012). Karen Brown is a Reuters market analyst. The views expressed above are her own. (By Karen Brown Editing by Matthew Lewis)



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