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Corn and Soybean Yields are YUUUGE

Market Intel / August 16, 2018

Credit: CC 2.0 by United Soybean Board 

Corn Production and Prices

Providing the first survey-based estimate of corn and soybean yields, USDA’s August 10 Crop Production report estimates the average corn yield at a record 178.4 bushels per acre, above the average industry expectation of 176 bushels per acre and 1.8 bushels above last year’s record-setting level. 

Total U.S. corn production is now estimated at 14.6 billion bushels, down less than 1 percent from the 2017/18 marketing year, but 356 million bushels above the department’s July projection. On the back of larger-than-anticipated corn yields and production, the 2018/19 marketing year average corn price is now projected at $3.60 per bushel, down from the projection of $3.80 in July, but 20 cents per bushel above 2017/18 levels.

Corn yields in 2018 are currently projected to be record-high. In fact, Alabama, Illinois, Nebraska, Ohio, South Dakota and Tennessee are projected to produce record corn yields in 2018. Figure 1 highlights 2018 corn yields by state and Figure 2 highlights the year-over-year change in corn yields.

The top corn-producing states in 2018 are expected to be Iowa at 2.6 billion bushels, followed by Illinois at 2.2 billion bushels and Nebraska at 1.8 billion bushels. The top 10 corn-producing states in 2018, highlighted in dark blue in Figure 3, will represent more than 83 percent of U.S. corn production in 2018.

Soybean Production and Prices

USDA’s August Crop Production report estimates U.S. average soybean yield at 51.6 bushels per acre, above the average trade expectation of 50 bushels per acre and 2.5 bushels above prior-year levels. This year’s soybean yield projection is 0.4 bushels below the record set during the 2016/17 marketing year.

Total U.S. soybean production is now projected at 4.6 billion bushels, up 4 percent from prior-year levels and 276 million bushels above USDA’s July estimate. If realized, U.S. soybean production in 2018 would be a new record and 194 million bushels above last year’s record-setting level.

Due to larger-than-anticipated soybean yields and production, ending stocks for the 2018/19 marketing year are projected at a record 785 million bushels. Stocks-to-use is projected at 18.4 percent, which would be the highest level since the 2006/07 marketing year. The combined effect of increased production and higher ending stocks resulted in USDA lowering expectations for the 2018/19 marketing year average soybean price to $8.90 per bushel, down 35 cents per bushel from the July projection. If realized, soybean prices in 2018/19 will be at the lowest levels since 2006/07’s $6.43 per bushel.

Alabama, Illinois, Indiana and Ohio are projected to produce record soybean yields in 2018. Figure 4 highlights 2018 soybean yields by state and Figure 5 highlights the year-over-year change in soybean yields.

During 2018, soybean production is projected at 4.6 billion bushels. The top soybean producing states in 2018 are expected to be Illinois at 694 million bushels, followed by Iowa at 581 million bushels and Minnesota at 379 million bushels. The top 10 soybean-producing states in 2018, highlighted in dark blue in Figure 6, will represent 78 percent of U.S. soybean production in 2018.

Contact:
John Newton, Ph.D.
Chief Economist
(202) 406-3729
jnewton@fb.org
 
Megan Nelson
Economic Analyst
(202) 406-3629
megann@fb.org
 

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USDA’s May 13 Crop Progress report revealed the U.S. corn crop at 30% planted, down 36 percentage points from the five-year average of 66% complete at this point in the planting season and down 29 percentage points from 2018 progress. Analysts had projected corn plantings at 35% complete. Similar delays are being realized in the U.S. soybean crop with only 9% planted, down 20 percentage points from the five-year average of 29% planted and down 23 percentage points from last year. Soybean plantings are down 6 percentage points from analysts’ expectations of 15%.

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