In most instances, when USDA projects a large crop for a given year, it usually gets even bigger as the crop is harvested. This was certainly the case with the recently released Nov. 9 USDA crop report, which featured a major increase in the expected U.S. corn yield and production for 2017. USDA increased corn projected national average corn yield by 3.6 bushels per acre and increased the total 2017 U.S corn production by 298 million, compared to October USDA estimates. The November USDA projected national average soybean yield and total production level for 2017 remained the same as a month earlier.
The latest USDA report estimates the total U.S. corn production for 2017 at just under 14.6 billion bushels, which trails only last year’s record U.S. corn production of 15.15 billion bushels. The 2017 projected corn production exceeds other recent U.S corn production levels of 13.6 billion bushels in 2015, 14.2 billion bushels in 2014, and 13.8 billion bushels in 2013. USDA is now estimating the 2017 national average corn yield at the record level of 175.4 bushels per acre, which surpasses last year’s record U.S. corn yield of 174.6 bushels per acre. The 2017 corn yield estimate compares to other recent U.S. corn yields of 168.4 bushels per acre in 2015, 171 bushels per acre in 2014, and 158.1 bushels per acre in 2013. The November USDA corn yield and production levels exceeded even the highest estimates by professional grain traders.
The latest USDA report estimated 2017 U.S. soybean production at the record level of 4.42 billion bushels, surpassing last year’s record production of nearly 4.3 billion bushels, and compares to 3.93 billion bushels in both 2014 and 2015, and 3.36 billion bushels in 2013. USDA is now estimating the average 2017 U.S. soybean yield at 49.5 bushels per acre, which down from the 2016 record national soybean yield of 52 bushels per acre, and compares to 48 bushels per acre in 2015, 47.5 bushels per acre in 2014, and 44.0 bushels per acre in 2013. The 2017 harvested soybean acreage in the U.S. is projected at the record level of 89.5 million acres.
Based on the November USDA report, Minnesota is projected to have a 2017 corn yield of 190 bushels per acre, which is below last year’s record corn yield of 193 bushels per acre, but surpasses average yields of 188 bushels per acre in 2015, 156 bushels per acre in 2014, and 160 bushels per acre in 2013. USDA is estimating the 2017 Iowa corn yield at 197 bushels per acre, which trails only the 2016 record yield of 203 bushels per acre. Other estimates for 2017 average corn yields are Illinois at 198 bushels per acre, compared to 197 bushels per acre in 2016, Indiana at 181 bushels per acre, compared to 173 bushels per acre in 2016, Nebraska at 179 bushels per acre, compared to 178 bushels per acre in 2016, South Dakota at 150 bushels per acre, compared to 161 bushels per acre in 2016 and North Dakota at 134 bushels per acre, compared to 158 bushels per acre in 2016.
USDA is estimating the 2017 Minnesota soybean yield at 46 bushels per acre, compared to last year’s record yield of 52 bushels per acre, 50 bushels per acre in 2015, and 41.5 bushels per acre in 2014. The 2017 Iowa soybean yield is estimated at 56 bushels per acre, compared to the 2016 record yield of 60 bushels per acre. Other projected State soybean yields for 2017 are Illinois at 58 bushels per acre, compared to 59 bushels per acre in 2016, Indiana at 55 bushels per acre, compared to 57.5 bushels per acre in 2016, Nebraska at 58 bushels per acre, compared to 61 bushels per acre in 2016, South Dakota at 45 bushels per acre, compared to 49.5 bushels per acre in 2016, and in North Dakota at 35 bushels per acre, compared to 41.5 bushels per acre in 2016.
The monthly USDA supply and demand report released on Nov. 9 was viewed as bearish for corn and neutral for soybean market prices in the coming months. The report showed similar overall 2017-18 U.S. corn supply estimates to those that existed in 2016-17, but showed increasing corn carryover levels by the end of the 2017-18 marketing year. The record projected 2017 U.S. corn yields were offset by a reduction in estimated 2017 harvested corn acreage, which lead to a lower estimated total corn production in 2017, compared to a year earlier. Total demand for corn usage in 2017-18 was increased slightly from the October estimate, but is projected to decrease from the total corn usage in 2016-17. This is primarily due to expected declines in corn export levels in the coming year; however, slight increases are projected in corn used for livestock feed and ethanol production.
USDA is now estimating 2016-2017 U.S. corn ending stocks at over 2.48 billion bushels, which would be at the highest level in about two decades. The estimated 2017-18 corn ending stocks compare to carry-out levels of 2.29 billion bushels in 2016-17, 1.74 billion bushels in 2015-16, and 1.73 billion bushels in 2014-15. The large projected 2017-2018 corn carryover stocks will likely prevent significant rallies in the corn market during the next few months, unless some other factors emerge.
The 2017-18 soybean ending stocks in the November report were estimated at 425 million bushels, which would be an increase of 41 percent from the 2016-17 ending stocks of 301 million bushels, and would considerably higher than the ending stock levels of 197 million bushels for 2015-16, and 191 million bushels for 2014-15. The projected 2017-2018 soybean ending stocks would be the highest level in the past decade, with the soybean stocks-to-use ratio estimated at nearly 10 percent, compared to only 5.0 percent in 2015-16. Soybean demand is projected to increase in 2017-18 compared to a year earlier, due to estimated increases in both the soybean crush and export levels. This combination should help ease the downward pressure on soybean market prices early in 2018.
USDA is currently estimating the U.S. average on-farm cash corn price for 2017-2018 in a range of $2.80-3.60 per bushel, or an average of $3.20 per bushel. USDA is projecting the U.S. average soybean price for 2017-2018 in a range of $8.45-10.15 per bushel, resulting in an average soybean price of $9.30 per bushel, which an increase of 10¢ per bushel from the October estimate. The 2017-18 USDA price estimates are the expected average farm-level prices for the 2017 crop from Sept. 1, 2017 to Aug. 31, 2018, and are not estimated prices for either the 2017 or 2018 calendar year. The current 2017-18 projected average corn and soybean prices are very similar to the projected prices a year ago at this time for the 2016-17 marketing year.
The projected USDA average on-farm corn price of $3.20 per bushel for 2017-2018, compares to an average corn price of $3.36 per bushel for 2016-17, $3.61 per bushel for 2015-16, and $3.70 per bushel for 2014-15. The USDA soybean price estimate of $9.30 per bushel for 2017-18, compares to $9.47 per bushel in 2016-17, $8.95 per bushel for 2015-16, and $10.10 per bushel for 2014-15. The projected strong demand levels for both corn and soybeans should help offset the large projected increases on the supply side, which may help temper sharp corn and soybean price declines in the coming months.