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Analysts will Key on Yield Portion of USDA September Report


September report preview

Jim Riley
Jim Riley

There are early reports of good U.S. corn yields and as the USDA report release nears the average of trade estimates suggests the agency will not make much change to the yield. But analyst and broker Jim Riley said he will look first at the yield numbers since major acreage tweaks are unlikely.

“We’re not expecting any major acreage reductions probably until October. It could be a surprise if they did start tweaking it. Personally I think they should but I highly doubt if they will. That’s out of character for USDA.”

So Tom Fritz, a Chicago-based analyst with EFG Group, says the attention is focused on yield.

Tom Fritz
Tom Fritz

“The bottom line is you look at an average guess on corn yield of 153.8 and that’s only off 6 tenths of a bushel from USDA’s August estimate,” he told HAT. “That suggests we still have a lot of corn.”

As he says everybody believes the corn and soybean acres need to be lowered, but FSA doesn’t deliver its acre update to USDA until September 17th. If projected yields hold up corn supply might not be a problem even when there’s an announcement of reduced acres.

“Most people are with the frame of mind we could lose as many as 2 million corn acres, but if we continue to show a yield hanging around this 153 to 154 area, it suggests we still have ample supplies of corn going forward.”

The average for trade estimates on soybean yield is 41.2 bushels per acre. Fritz says if USDA is close to that number it will confirm tightness in soybeans.

“It’s down 1.4 from the August estimate. That’s going to create a very tight scenario, and given anecdotal yields that we’re hearing from what few beans that have come in, bean yields aren’t very good.”

The average estimate for US corn production is 13.62 billion bushels and 3.14 billion bushels for total soybean production.