A rise in projected U.S. corn yields and production provided the marketplace surprise when USDA released its September crop and world outlook reports Thursday. The corn market reacted by going sharply lower but the soybean forecast of 3 percent lower production than the August report was a big boost for that market which finished the trading session well over 30 cents higher.
Analyst Mike Silver from Kokomo Grain says the culprit is the weather.
“As the market expected the dry weather was a big influence on the yield in the soybeans,” he told HAT. “The yield estimate is now 41.2 bushels per acre national average yield, compared to 42.6 in the August report, and there would be some who would question if the 41.2 will actually be the number when we finish up the year, basis the dry weather we’ve had in August.”
Corn production at 13.8 billion bushels is up just below 1 percent from the August forecast and yield was bumped up to 155.3 bushels per acre.
“I think there would be a number of folks who would take deference to that increase in corn yield because of the dry weather we’ve had, but nonetheless the early indications of yield from around the Corn Belt for the early harvested corn do have some yields better than expected, especially down in the Delta and the southern states. And early yields for some of the better corn have been a little better than expected, so I guess it’s not surprising that they would come with 155.3.”
He pointed out that the soybean/corn ratio continues to widen and by the end of Thursday it was getting very close to 3 to 1 for November beans vs. December corn. Now Silver says the market turns its attention to the acreage report.
“Farm Service Agency will update the planted and prevented planted acreage numbers and the market is going to look forward to those,” he said.
There were no adjustments made Thursday to planted acres but it won’t be a long wait to see the new FSA report. It comes out Tuesday, September 17th.
Soybean production is forecast at 3.15 billion bushels, and although it is down that 3 percent from August it is up 4 percent from last year. If realized, production will be the fourth largest on record. Click here for the full USDA report.