Record yield pegs for US corn and soybeans face

By Karen Braun
NERVILLE, Illinois, Sept 11 – Fresh government estimates for the U.S. corn and soybean crops are notorious for jolting the grain market and sometimes changing overall sentiment.
That is not the most probable outcome on Thursday as crop pegs are already very large, but corn may have an easier path to potential supply excitement versus soybeans given the recent fundamentals.
On average, analysts expect the U.S. Department of Agriculture on Thursday will peg U.S. corn yield at 182.4 bushels per acre, down from 183.1 in August and well ahead of last year’s record of 177.3 bpa.
That would be an unusually light change from the August yield, as an adjustment closer to 2 bpa has been seen in the past few Septembers, on average. But the trade rarely suffers a complete miss on the September corn yield, which fell outside the range of guesses just twice in the last two decades.
However, analysts are working with a tight margin for error as their corn yield guesses span just 3 bpa, the narrowest for this report in at least two decades. The highest estimate of 183.5 bpa is very close to USDA’s August yield, and this is an area to watch for a possible surprise.
U.S. soybean yield is seen unchanged from August at 53.2 bpa. In the last few years, September soy yield varied by about 1 bpa versus August, on average.
Analysts have left wiggle room with soy yield given the 2.9-bpa range of estimates, well above average. The top guess of 54.9 offers extra coverage on the high side.
It is interesting to note that USDA’s September corn yield has not come in below the average trade guess since 2015. USDA’s soy yields were also above the trade averages in every September from 2013 through 2021, but they were below expectations in the last two years.
PRODUCTION FOCUS
The trade’s corn and soy yield expectations for Thursday are higher than its pre-August report predictions, suggesting increasing comfort in the huge targets.
Recent weather could be an obstacle, however, as last month was the Midwest’s driest August since 2013 and much of the area has remained very dry so far this month.
The crops avoided excessive heat this summer, but both this week and next week will feature temperatures well above normal. This could prevent some of the later-planted corn ears from filling kernels to their full potential, possibly shaving yields.
USDA last month revised planted and harvested corn and soybean areas, so acreage-driven production surprises might be less likely this month.
However, USDA last month unexpectedly increased soybean plantings by 1 million acres versus the June estimate, a move that was abnormally large and directionally atypical. This is an item to monitor on Thursday for any possible changes.
CORN VERSUS BEANS
Lofty crop expectations reduce the chances that a surprisingly low production number on Thursday could change the bearish market tone, though it might be easier to ignite optimism in corn rather than soybeans.
When USDA issued its first official 2024-25 estimates in May, U.S. corn ending stocks were seen rising 4% from 2023-24 and soy stocks were pegged up 31%.
But trade estimates for Thursday suggest 2024-25 U.S. soy ending stocks surging 66% on the year versus a more modest 8% increase for corn.
Export demand is friendlier for U.S. corn right now versus soybeans. Corn export sales for 2024-25, which began Sept. 1, are on a relatively normal pace.
But soybean sales are sluggish compared with USDA’s export targets, putting upward pressure on already ample ending-stock estimates. It is unclear if the agency is prepared to make export cuts at this early stage if the crop size is not reduced.
Chicago corn and soybean futures have eased over the last week but remain a bit above last month’s contract lows. Thursday’s data could give traders a feel for whether those lows will hold or if new ones are on the way in the coming weeks. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
This article was generated from an automated news agency feed without modifications to text.