Crop Estimates Decline Amid Harvest; Top Yields in Illinois

BY DANIEL GRANT, FARMWEEK

U.S. crop output estimates continue to shrink mid-harvest as corn and soybeans move from fields to elevators and on-farm storage.

Based on conditions as of Oct. 1, USDA’s National Agricultural Statistics Service pegged U.S. production at 13.895 billion bushels of corn and 4.31 billion bushels of soybeans, both down about 1% compared to last month’s estimates.

Nationwide, yields are projected to average 171.9 bushels per acre for corn, down .6 bushels from last month’s estimate, and 49.8 bushels for soybeans, .7 bushels below the previous forecast.

“It was a bigger-than-expected yield reduction for soybeans,” Joe Camp, market analyst with Commstock Investments, told the RFD Radio Network. “There was enough of a production reduction to offset recent supply found from last year’s crop and, therefore, soybean ending stocks were left unchanged at 200 million bushels. That’s a tight number.”

“When all was said and done, the carryout estimate (for corn) was maybe a little heavier than expected,” Camp said. “It wasn’t as bullish of a balance sheet update as it was for soybeans.”

While Illinois farmers faced a multitude of weather and crop production challenges this season, the state is on track to be this year’s “garden spot,” the term often used by traders to describe locations with the highest yields, according to the latest crop production report.

USDA pegged average yields in Illinois at 64 bushels per acre for beans, which, if realized, would be the highest in the nation this season, and 210 bushels for corn, up 6 bushels from the previous estimate and the top state yield in the Corn Belt.

“So far it’s fitting the trend for yields is still lower (given widespread drought issues nationwide),” Camp said. “Part of the big support for yields is the Illinois (corn) crop, revised up to 210 bushels. But, it’s not enough to offset the struggles in the South and West.”

Yields in neighboring states were pegged at 200 bushels per acre for corn and 58 bushels for beans in Iowa and 187 bushels for corn and 59 bushels for beans in Indiana.

Tighter crop supplies, strong value of the dollar and recent shipping issues on the Mississippi River system because of low water levels serve as headwinds for crop demand, though. USDA trimmed its export forecasts by 125 million bushels of corn, 40 million bushels of beans and 50 million bushels of wheat.

“Nearby demand has suffered (also due in part to competition from South America),” Camp noted. “But, at the end of the day, long-term we’re still bullish demand. Supply trends are tightening (globally) and the U.S. has supply we can offer the world that is still much needed.”

That was evidenced by recent grain purchases from China.

USDA raised its 2022-23 season average price estimates by 20 cents for wheat, to $9.20 per bushel, and 5 cents for corn, to $6.80 per bushel. It rounded the soybean price estimate to an even $14 per bushel.

“It’s a report that reminds us supplies are tight and demand is still strong,” Camp added.