The August Crop Report was extremely bullish and the market is expected to open accordingly this morning. USDA's field samples showed this summer's hot, dry conditions have had a greater-than-expected impact on yield potential.
The corn crop was pegged at only 8.886 billion bushels, down more than 900 million bushels from the estimate released a month ago. The national average yield is expected to be only 125.2 bushels. All major corn producing states are expected to see a big drop in average yield, except Iowa and Minnesota. Higher prices are expected to reduce corn usage somewhat during the next marketing year, but the carryover projection was cut to only 767 million bushels.
It's pretty much the same story in soybeans, except USDA also raised its export projection for the current marketing year by 15 million bushels. The crop is only expected to total 2.628 billion bushels, with a national average yield of 36.5 bushels. If it remains hot and dry in the Midwest, that number could be cut again. This leaves ending stocks for the next marketing year at a squeaky tight 155 million bushels.
The spring wheat crop was also hurt by this year's weather and USDA knocked 38 million bushels off of that projection. Total wheat production is now expected to be down 14% from last year at only 1.686 billion bushels. Plus, wheat production is down around the world. The global ending stocks figure was cut by 8.3 million tons or 7.7% from the month-ago estimate.
Editors note: Richard Brock, Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.
To see more market perspectives, visit Brock's Web site at www.brockreport.com.