Tuesday morning’s first USDA survey estimate of corn and soybean production held a bullish surprise for the soybean market and moderately bearish news for corn prices as USDA pegged the national average soybean yield more than a bushel below its July projection, while raising its corn yield estimate by more than 6 bu./acre.

USDA’s August Crop Production Report pegged the U.S. soybean crop at 2.973 billion bushels on a national average yield of 40.5 bu./acre, down from its July projection of 3 billion bushels on a yield of 41.6 bu.

USDA’s soybean yield estimate was below trade expectations, which averaged 41.6 bu./acre in a range from 40.7 to 42.5 bu., according to a survey taken by Dow Jones Newswires. The crop production number was near the low end of expectations, which averaged 3.003 billion bushels in a range from 2.957 to 3.1 billion bushels.

USDA put the U.S. corn crop at 12.288 billion bushels on a national average yield of 155 bu./acre, up from its July projection of 11.715 billion bushels on a yield of 148.4 bushels.

The USDA corn crop estimate was near the high end of trade estimates, which averaged 11.938 billion bushels in a range from 11.1 to 12.33 billion bushels.

At 12.288 billion bushels, the U.S. corn crop would be the second largest in history behind last year’s 13.074 billion bushels. At 2.973 billion bushels, soybean production would still be up 15% from last year’s 2.585-billion-bushel crop.

USDA forecasts lower soybean yields in the key producing states of Illinois, Iowa and Minnesota, as well as in Louisiana, Mississippi, Ohio, Texas and across the northern and central plains. Yield prospects are seen higher than last year or unchanged across the remainder of the country with the largest increases in Kentucky and Tennessee, USDA said.

The lower soybean yield estimate comes despite significant improvement in USDA’s crop condition ratings since June. U.S. soybeans were rated 63% good/excellent as of Aug. 3, up from 59% a month earlier and 56% a year earlier.

USDA forecasts higher corn yields than last year in the northern and eastern Corn Belt, Ohio and Tennessee valleys and the northern half of the Atlantic Coast as a result of better rains. Expected yields across the southern Great Plains and the Carolinas are below last year due to drought-like conditions for much of the growing season, USDA said.

A larger corn yield was expected based on USDA’s crop ratings. The U.S. corn crop rating had improved to 66% good/excellent as of Aug. 3, up from 62% a month earlier and 53% a year earlier.

USDA made some changes in its corn and soybean acreage estimates after resurveying about 9,000 farmers in Midwestern states affected by June flooding to better ascertain their crop intentions.

USDA lowered its estimate of corn-planted acreage by about 350,000 acres to 86.98 million, but raised its expectations for harvested acreage by about 190,000 acres to 79.29 million.

Soybean plantings were raised by about 280,000 acres to 74.78 million acres, while soybean harvested acreage was raised significantly to 73.34 million acres from a previous estimate of 72.12 million acres.

Editor’s note: Richard Brock, The Corn & Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.