CME: 2011 USDA Corn Yield Estimates Down Again

US - USDA will kick off the new year of “highly anticipated” crop production data Thursday with its monthly Crop Production and World Agricultural Supply and Demand Estimates (WASDE), quarterly Grain Stocks and annual Winter Wheat Seedings reports, write Steve Meyer and Len Steiner.
calendar icon 10 January 2012
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The results of Reuters’ pre-report survey of market analysts regarding their estimates of the USDA numbers appear below. These survey results are offered to provide a sense of the information that is “in the market” prior to the report. The average’s shown here provide some idea of what “the market” is expecting to see. Actual report numbers that differ substantially from these averages usually result in futures contract price changes.

As expected, analysts’ expectations for USDA estimates of 2011 corn and soybean yield and production are basically “fine tuning” of previous estimates. They expect, on average, the corn yield to be lowered again,this time to 146.2, down 0.5 bushels from December and 4.4 per cent lower than the 2010 yield.

The yield decline is expected to shave 45 mil. bu. off USDA’s 2011 corn crop estimate. At 12.265 bil. bu., the 2011 crop would be 1.5 per cent lower than one year earlier but would still rank as the fourth largest US corn crop on record.

USDA’s 2011 soybean yield estiamtes is expected to be raised slightly to 41.4 bushels per acre, up 0.1 bushels from last year. That yield would be 4.9 per cent smaller than last year. The 2011 bean crop is, quite logically, also expected to be slightly from last month’s estimate to 3.048 billion bushels. At that level, the 2011 crop would rank as the sixth largest in history.

Analysts expect 1 December, 2011 US corn and wheat stocks to be sharply lower than one year ago. That number certainly makes sense for wheat due to significantly lower hard red winter wheat output last year and higher feeding levels for soft red wheat last summer. Total wheat stocks are expected to be 1.695 billion bushels on 1 December, 2011, 12.3 per cent lower than last year.

Corn stocks at an expected 9.391 billion bushels would be 6.7 per cent below last year levels. The 2011-12 crop year started off with 580 million fewer bushels in inventory, added 137 million fewer bushels of production (according to USDA’s December estimates) than was added by the 2010 crop and there are now 666 million bushels less in inventory as of 1 December.

Do the math and those figures say that total corn usage in the Sep 1—Dec 1 quarter was 4.047 billion bushels compared to 4.121 billion bushels one year ago. Slower exports were more than offset by higher ethanol usage (due to an apparent race to capture blenders tax credits before they expired on December 31).

We do not believe that feed usage was much lower in the quarter relative to last year due to higher numbers of hogs and cattle on feed offsetting lower chicken numbers.

Winter wheat seedings show total acres slightly higher (by 0.7 per cent) than one year ago but some shifts among the types of wheat.

Hard red seedings, which account for over 70 per cent of the total) are expected to be nearly 1 million acres higher than last year while soft red seeding are expected to fall by nearly 800,000 acres. Moisture conditions in the wheat belt have improved considerably but continued improvement in conditions in Oklahoma, Texas and Kansa will be key for the hard red wheat crop next summer.

With all that said, the numbers that will get the most attention will be USDA’s estimates of South Americanc orn and soybean crops. Informa Economics on Friday cut its estimate of Argentina’s corn crop by three million MT (11 per cent) to 24 mil. MT.

It also lowered its estimate for Brazilian corn to 61 mil. MT, down 2 mil. MT. or 3.2 per cent from prior estimates. Informa lowered its estimates of both countries’ soybean harvests by two mil. MT — to 51 mil. MT for Argentina and 72 mil. MT for Brazil.

Further Reading

- You can view the full report by clicking here.
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