USDA Reduces Corn Crop Size
Published: Friday, November 15, 2024
The following is from Sarina Sharp of the Daily Dairy Report.
The old-timers on LaSalle Street (Chicago) will tell you that "Big crops get bigger." The adage highlights USDA's propensity to take a cautious approach to yield estimates until they can make a full accounting long after the crop is in the bin. But this year's big crops did not "get bigger." In fact, after USDA shocked the market with its record-shattering yield forecasts this fall, it was forced to retreat. In last Thursday's monthly update, USDA trimmed its assessment of the corn yield by .7 bushels per acre compared to its October estimate.
Still, at 183.1 bushels per acre, the national average corn yield is easily the highest ever, topping the record set last year by a convincing 5.8 bushels. There's no shortage of corn. USDA expects there will be 1.94 billion bushels left over when the next harvest arrives, which would be the highest carryover inventory in six seasons.
USDA made deeper cuts to its soybean yield estimate. The agency now pegs the national average soybean yield at 51.7 bushels per acre, down 1.4 bushels from its October estimate, a 2.6% decline. The revised numbers showed the yield tied with 2021 for the highest on record. While previous estimates projected a record-setting crop, the harvest is now expected to be negligibly smaller than the all-time high set three years ago. USDA also reduced its forecast for demand from crushers and foreign buyers. With that, the agency projects end-of-season stocks at 470 million bushels, 80 bushels less than it had forecast in October.
The unexpected declines in USDA's crop production estimates lifted benchmark corn and soybean futures to one-month highs. December corn closed at $4.3125 per bushel, up 17 cents for the week. January soybeans climbed 37 cents to $10.31. December soybean meal rallied $2 to $297 per ton. But the big picture hasn't changed. Grain and oilseeds are plentiful and inexpensive. The bins are full, and the market must keep prices low enough to entice importers in the face of stiff competition from South America, a strong dollar and the potential for new trade battles.
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