Big Crops Keep Getting Bigger
October 12, 2021
USDA once again surprised analysts with its monthly World Agricultural Supply and Demand Estimates (WASDE) released today. The department raised its forecast for corn production to 15.019 billion bushels, up 23 million bu. from September, while the average grain analyst estimate was calling for a 23 million bu. reduction. USDA also raised its corn yield estimate to 176.5 bu. per acre, 0.5 bu. higher than the average trade estimate and 0.3 bu. larger than last month. While old-crop corn supplies remain historically tight, USDA now expects the 2021-22 carryout to reach 1.5 billion bushels, up 92 million bushels from last month.
USDA also increased its soybean production estimate to 4.45 billion bushels, which was slightly higher than the average trade estimate and 74 million bushels higher than last month. The department also bettered its soybean yield forecast by 0.9 bu. to 51.5 bu. per acre, helping to lift new-crop carryout by 135 million bushels to 320 million bushels, a substantial increase. Larger old-crop stocks plus a bigger 2021 yield means harvest bean supplies will be 3.2% larger than USDA projected last month.
Farmers continued to harvest U.S. corn and soybeans at a rapid rate last week. And early reports indicate that late summer rains helped withered crops in parts of the Dakotas and Upper Midwest, corresponding with USDA’s increased yield estimates.
In China, following last year’s record-high prices, farmers are expected to reap one of the country’s largest corn crops in years, but rare heavy rainfalls in large swaths of northern China have delayed both harvest and corn drying. While China’s corn harvest could still be record large, torrential rainfall has raised concerns over quality. Moreover, a severe coal shortage in China, also made worse by heavy rain that has temporarily shuttered mines, will reduce the volume of corn dried industrially.
Both corn and soybean futures through November 2023 fell in the wake of the WASDE report, providing dairy producers with some much-needed relief.