USDA’s August 1 Crop Report

The most anticipated crop report of the production year was released earlier today by USDA’s National Agricultural Statistics Service, which forecast the second largest corn crop and fourth soybean crop on record. But USDA also said the Cornbelt was not going to produce as much as would be expected.

USDA’s first objective yield estimate, in which statisticians took field surveys, found 5% more corn than last year and 8% more soybeans compared to 2008. But USDA also said corn “Yield prospects are lower in the central Corn Belt where excessive spring moisture delayed planting and below normal temperatures slowed corn emergence and development.” Regarding soybeans, USDA said, “With the exception of Illinois, yields are forecast higher or unchanged from last year across the Corn Belt and Great Plains.” And UDSA also said ear counts were unusually high in most states, “The August 1 corn objective yield data indicate a record high number of ears per acre for the combined 10 objective yield States (Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Nebraska, Ohio, South Dakota, and Wisconsin). Record high ear counts are forecast in all objective yield States except Illinois, Missouri, and Wisconsin.”

USDA also expressed its concern about the delay of the corn crop, particularly in Illinois, “Double-digit silking progress was evident mid-month throughout much of the Corn Belt; however, large phenological delays remained in Illinois and Indiana. In Illinois, the second largest corn-producing State, silking was 2 weeks behind the normal pace on August 2. Seven percent of this year’s corn crop was at or beyond the dough stage on July 26 and had reached 14 percent complete by August 2, slightly behind last year and 15 points behind the 5-year average. Doughing had yet to begin in Minnesota and North Dakota, leaving progress over 1 week behind normal in both States. Overall, the condition of the corn crop declined 3 points during July, with 68 percent rated good to excellent on August 2.”

Based on the corn yield and production estimates of 12.761 billion bushels, USDA revised its consumption forecasts. With the upward bump of 471 million bushels of corn from the July estimate, USDA pushed feed demand up 100 million bushels to 5.300 billion, pushed up ethanol demand by 100 million bushels to 4.200 billion, and pushed up exports 150 million to 2.150 billion bushels. The carryout was raised from 1.550 billion in July to 1.621 billion at the end of August 2010. USDA revised the national average price range down by 25¢, and reset the range to be $$3.10 to $3.90 per bushel.

Compared to the USDA report, a survey of commodity traders indicated they had been expecting a 12.554 billion bushel corn crop (in a range of 12.3 to 12.8 billion), with a national average yield of 157.1 bushels per acre. The market had also expected the new crop corn carryout to be 1.697 billion bushels.

The August report comes just two days before Friday’s deadline for signing up for the ACRE program, and many farmers had awaited the report’s estimate of state production to help determine their strategy, whether or not to sign up their 2009 crop into the irrevocable ACRE program. USDA’s Cornbelt state estimates for corn yields were:
Illinois: 175 bu.
Indiana: 163 bu.
Iowa: 185 bu.
Kansas: 143 bu.
Michigan: 140 bu.
Minnesota: 167 bu.
Missouri: 146 bu.
Nebraska: 166 bu.
North Dakota: 118 bu.
Ohio: 165 bu.
South Dakota: 141 bu.
Wisconsin: 135 bu.

Based on the soybean yield and production estimates of 3.199 billion bushels, USDA revised its consumption forecasts. With production being lowered from the July estimate of 3.260 billion to 3.199 billion bushels, USDA nudged the crush down 10 million bushels to 1.670 billion bushels, and also pushed exports down 10 million bushels to 1.265 billion bushels. The August 2010 carryout was estimated at 210 million bushels, down from the 250 million forecast in July. USDA revised the national average price range up by 10¢, and reset the range to be $8.40 to $10.40 per bushel.

The market had been expecting a 3.213 billion bushel soybean crop (in a range of 3.0 to 3.3 billion) with an average yield of 42.1 bushels per acre. New crop ending stocks in August of 2010 were expected by the market to be 212 million bushels.

USDA’s Cornbelt state estimates for soybean yields were:
Illinois: 44 bu.
Indiana: 45 bu.
Iowa: 52 bu.
Kansas: 38 bu.
Michigan: 37 bu.
Minnesota: 40 bu.
Missouri: 40 bu.
Nebraska: 49 bu.
North Dakota: 29 bu.
Ohio: 47 bu.
South Dakota: 37 bu.
Wisconsin: 39 bu.

USDA also revised the soybean acreage in many Cornbelt states based on planting difficulties when the June 30th report was being prepared. The latest estimates are:
Illinois: 9.100 million.
Indiana: 5.500 million
Iowa: 9.800 million
Kansas: 3.600 million.
Michigan: 2.000 million.
Minnesota: 7.200 million
Missouri: 5.400 million
Nebraska: 4.700 million
North Dakota: 4.050 million
Ohio: 4.600 million
South Dakota: 4.350 million
Wisconsin: 1.640 million
Total US acres for soybeans were reset to 77.723 million, up slightly from the June estimate.

Summary:
The August 1 Crop Report from USDA forecast corn production at 12.8 billion bushels, 2% under the 2007 record crop, partially from poorer yield expectations in the Eastern Cornbelt. The national average corn yield was project at 159.5 bushels per acre. Soybean production would be the fourth highest at 3.20 billion bushels, with a 41.7 bushel per acre average. USDA also revised the soybean acreage up slightly from June.