USDA crop report sends corn prices tumbling; local crop progress improved
By Tim Krohn
MANKATO — The latest crop production report from the USDA surprised farmers and analysts and sent corn prices tumbling this week.
“It caught people off guard. It’s been quite a downward spin,” said Kent Thiesse, farm management analyst at MinnStar Bank in Lake Crystal.
Monday’s corn prices fell by the limit of 25 cents following release of the report and more losses came Tuesday. December corn futures dropped to $3.76 per bushel. “At the end of June we were up to $4.53 a bushel for December corn, so it’s been a downward spiral since then, Thiesse said.
Area farmers say improved weather in recent weeks has helped crop progress after a wet spring and late planting, but conditions vary widely depending on location.
“I can drive within four miles and find a field (that wasn’t planted), and then we have about 15% damage from a blowdown and there are other fields that look good,” said Garden City farmer Bob Roelofs.
Caesar Larson, who farms in the Amboy and Lake Crystal area, said the high winds that came through about three weeks ago damaged a lot of crops in the area.
“It snapped a lot below the ear and a lot was goosenecked as well. I think it’s worse than people think. That took 30 to 50 bushes (per acre) off these fields (in yield),” Larson said.
He said soybeans are moving along well. “But I think the top-end yield will be trimmed a little because of the late planting.”
Larson said soybeans in his area also look good, but both men said farmers will need a late killing frost to give crops time to fully mature.
Thiesse said crop progress is one to two weeks behind normal in the region.
“Locally, beyond the damage we had from late planting and a few severe storms, our crop progress has come along pretty good. We haven’t stressed from lack of moisture much; we’ve had these spotty showers helping out.”
He said the weather conditions have helped soybeans. “It might be like last year where the weather favored soybeans, and we had average soybeans and lower corn (yields).”
The USDA’s corn outlook is for larger supplies, fewer exports and less corn used for ethanol, all leading to larger stocks of stored grain going into next year.
Meanwhile USDA increased its estimates for corn production to 13.9 billion bushels, up 26 million from the July projection as a decline in harvested acres is offset by an increase in yield.
“The surprising thing in the USDA report was they increased average corn yield, up from 166 bushels per acre (in July) to 169.5,” Thiesse said. “I think that caught a lot of analysts off guard.”
Even with the improved yield estimates, Minnesota, Illinois, Indiana, Iowa, Nebraska, Ohio, and South Dakota are forecast to have yields below a year ago.
Another report from the Farm Service Agency showed a much higher number of acres that weren’t planted at all compared to the USDA report.
“You had two different numbers coming out from two different agencies,” Thiesse said.
He said the competing numbers have to do with different ways each agency makes their estimates, using a combination of test plots, surveys of farmers, drone information and reports farmers have to file related to their crop insurance.
“The big focus needs to be harvested acres. That’s the acreage harvested for grain and not for silage or acres not harvested at all,” Thiesse said. “We’re a long way down the road from knowing where we’re at there.”
Monday’s USDA report pegged this year’s U.S. soybean acreage at 76 million. That’s lower than the 80 million acres estimated in July.
USDA predicted soybean production at 3.68 billion bushels compared to 3.84 billion in July.
They put the soybean yield average at 48.5 bushels per acre, the same as July’s estimate.