Crop Report Highlights and Projected Carryover Stocks

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Normally, the October USDA Crop Report does not attract the same attention as some other months, because the crop production numbers are fairly well established. However, this was not the case in 2011, with the tremendous amount of uncertainty surrounding corn and soybean yields due to variable weather conditions late in the growing season. The USDA Crop Report released on Oct. 12 showed a slight decrease in the expected U.S. corn and soybean production for 2011, as compared to the September USDA estimates, with both estimates being decreased by about 1%.

USDA is now estimating the total 2011 corn production at 12.4 billion bushels, which is close to final U.S. corn production total in 2010, and compares to 13.1 billion bushels in 2009, and 12.1 billion bushels in 2008. The USDA report is estimating total soybean production in 2011 at 3.06 billion bushels, which compares to U.S. soybean production of 3.33 billion bushels in 2010, 3.36 billion bushels in 2009, and 2.96 billion bushels in 2008.

In the Oct. 12 report, USDA left the 2011 average corn yield in the U.S. at 148.1 bu./acre, which is the same as the September corn yield estimate. The projected 2011 yield would be below the 2010 U.S. corn yield of 152.8 bu., and well below the record U.S. average corn yield of 164.7 bu. in 2009. The average U.S. soybean yield for 2011 is now estimated at 41.5 bu./acre, which is down slightly from the September USDA estimate of 41.8 bu. The 2011 soybean yield estimate is below the 2010 U.S. soybean yield of 43.5 bu., and the record U.S. soybean yield of 44.0 bu. in 2009.

Based on the Oct. 12 report, USDA is estimating the 2011 corn yield in Minnesota at 165 bu./acre, which is the same as the September estimate, and well below the 2010 record corn yield of 177 bu. The report estimated the 2011 Minnesota soybean yield at 41 bu./acre, which was also the same as the September report, but is 4 bu. lower than the 2010 state average soybean yield of 45 bu., which tied a for record average state soybean yield. Given the very dry conditions in most of southern and western Minnesota in August and September, along with the early frost in many areas of the state on Sept. 15, it makes one wonder if the USDA projected statewide average corn and soybean yields for 2011 in Minnesota are attainable. Based on lower-than-expected reported yield results from around the state, except in southeastern Minnesota, don’t be surprised if Minnesota’s final statewide average corn and soybean yields for 2011 are lowered by USDA.

 

Projected Carryover Stocks

USDA also released the latest estimates for 2011-2012 carryover stocks of corn, soybeans and other grains on Oct. 12. USDA is now estimating 2011-2012 U.S. corn carryover stocks at 866 million bushels, which is an increase from the 672 million bushels projected in the September report. The expected 2010-2011 final corn carryover stocks were raised by 208 million bushels, compared to a month earlier, which accounted for the increase. This increase has been questioned by some industry analysts, since livestock numbers have been increasing in recent months, and corn use for ethanol and exports has remained strong. USDA is expecting 2011-2012 soybean ending stocks to be 160 million bushels, which down slightly from the September estimates, and is slightly above the final 2009-2010 final soybean ending stocks of 150 million bushels, but below the expected 2010-2011 final ending stocks of 215 million bushels. The amount of carryover stocks for both corn and soybeans remain relatively tight, which could result in more market price volatility in the 2011-12 marketing year.

USDA is currently estimating the U.S average cash corn price for 2011-2012 in a range of $6.20-7.20/bu., or an average of $6.70, which was a decrease of 30¢/bu. from September estimates. The final U.S. average corn price is currently estimated at $5.29 for 2010-2011, compared to $3.55 in 2009-2010, and $4.06 in 2008-2009. USDA is projecting the U.S. average soybean price for 2011-2012 in a range of $12.15-14.15/bu., resulting in an average soybean price of $13.15, which is a decrease of 50¢ compared to September USDA estimates. Final U.S. average soybean price for 2010-2011 is currently estimated at $11.94, compared to $9.59 for 2009-2010, and $9.97 for 2008-2009.

 

Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.

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