SEPT. CROP REPORT
The USDA Crop Report released on September 12 increased the estimated U.S. corn production by 289 million bushels from the August 1 estimate. The expected total production level in 2005 is now projected at 10.639 billion bushels, with a national average corn yield of 143.2 bushels per acre. This may seem surprising, given the drought conditions that have existed in much of Illinois and parts of Indiana, Missouri, and Michigan for much of the summer. Minnesota’s average corn yield on September 1, 2005, is projected at 157 bushels per acre, which is two bushels per acre lower than the final 2004 corn yield of 159 bushels per acre, but is up two bushels per acre from the from estimated yield of 155 bushels per acre on August 1, 2005. Some feel that the 2005 USDA corn production estimates for 2005 are “over-estimated”, given crop growing condition problems and storm damage in certain areas of Minnesota during the current year. The estimated 2005 corn yields in some other States of note include: Iowa – 169 bushels per acre, Illinois – 136 bushels per acre, Indiana – 149 bushels per acre, Nebraska – 160 bushels per acre and Missouri – 103 bushels per acre. The 2005 USDA estimated corn yield for Illinois of 136 bushels per acre is 24 percent lower than the 2004 record average corn yield of 180 bushels per acre.
Interestingly, the USDA Crop Report in September, 2004, projected a national average yield of 149.4 bushels per acre, and a total U.S. corn production of 10.96 billion bushels for 2004. The final actual USDA corn production figures for 2004 were a record total production of 11.8 billion bushels, with a national average yield of 160.4 bushels per acre, which represented more than a 7 percent increase over the September, 2004, USDA Crop Production estimate. Given the drought in parts of the Midwest, that type of production increase from the September 1st USDA estimates to the final production figures for the 2005 corn crop are not likely.
The estimated 2005 U.S. soybean production on September 1, 2005, according to the USDA Crop Report, was 2.856 billion bushels. This projection was 65 million bushels higher than the August 1, 2005 estimate, and was nearly the same as the USDA estimate of 2.83 billion bushels for the 2004 soybean crop on September 1, 2004. The final USDA total soybean production for 2004 was 3.14 billion bushels, with an average national yield of 42.5 bushels per acre. The projected national average soybean yield for 2005 is 39.6 bushels per acre. Minnesota’s projected average soybean yield for 2005 is 41 bushels per acre, which is 22 percent higher than the final soybean yield of 33.5 bushels per acre for Minnesota in 2004. The estimated 2005 soybean yields in some other Midwestern States include: Iowa – 45 bushels per acre, Illinois – 41 bushels per acre, Indiana – 45 bushels per acre, Nebraska – 44 bushels per acre and Missouri – 33 bushels per acre.
GRAIN MARKETS REACT NEGATIVELY
The corn and soybean futures prices on the Chicago Board of Trade (CBOT) were down sharply in the opening market quotes on Monday, September 12, in reaction to the “better-than-expected” September USDA Crop Report. 2005 new crop corn futures prices were down approximately 7 cents per bushel and soybean prices about 10 cents per bushel. The basis level for local cash corn prices in most of Southern Minnesota remains extremely wide at 50-60 cents per bushel, compared to the CBOT futures prices. This creates some serious grain marketing challenges for corn producers trying to market the remainder of their 2004 corn inventory, and in trying to set a price on their 2005 corn crop.
Editors 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 email@example.com.