Record US corn yields outweigh acreage drop

US corn production is still on a record pace as the latest US Department of Agriculture (USDA) estimates project average yield at 174.2 bushels/acre, more than offsetting a slight drop in expected harvested acres.

US corn production for 2014-15 is pegged at a record 14.48bn bushels, up 80mn bushels from September estimates, according to the October World Agricultural Supply and Demand Estimates (WASDE). The rise comes despite a 700,000-acre reduction to 83.1mn acres in expected harvested corn area—4.6mn acres less than 2013-14 estimates.

Record yields have more than made up for the decrease in harvested corn acreage. The 174.2 bushels/acre estimate is up by 2.5 bushels/acre from last month's projections and, if realized, would shatter the previous record of 164.7 bushels/acre set in 2009-10.

Projected US ending stocks were adjusted up by 80mn bushels to 2.081bn bushels to account for the higher production expectations. Average farm corn price estimates were lowered by 10¢/bushel to $3.10-3.70/bushel.

US soybean production expectations are also higher with increased yields outweighing a slight decrease in harvested area. Soybean production is projected at a record 3.927bn bushels, up 14mn bushels from September estimates, because of a 0.5 bushel/acre increase in average yields to 47.1 bushels/acre. Projected harvested soybean area fell 700,000 acres to 83.4mn acres.

Notably, US growers are expected to harvest almost all of the estimated 84.2mn acres of planted soybeans, while the corn planted area estimate of 90.9mn acres is 7.8mn acres higher than harvested area expectations.

US soybean ending stocks estimates were reduced by 25mn bushels from September to 450mn bushels because of a 38mn-bushel reduction in beginning stocks offsetting the increased production. Average farm prices for soybeans were also unchanged at $9-11/bushel.

The WASDE data added pressure to both corn and soybean prices, despite corn and soybean projections coming largely within market expectations. At midday, the December corn contract was down 7¢/bushel to $3.37/bushel while the November soybean contract dropped 9¢/bushel to $9.33/bushel.

Global corn production was revised up 3.2mn tonnes (t) to 990.7mn t with higher expected output from the US and European Union offsetting lower production from Russia, Ukraine and Belarus resulting from hot, dry growing conditions. World corn ending stocks were projected up by 670,000t to 190.6mn t.

World soybean production estimates also increased slightly to 311.2mn t with small reductions in China and Russia output offset by gains in the US and European Union. Soybean ending stocks are forecast up by 500,000t to 90.7mn t with an increase in Argentina stocks offsetting the US decrease.

bh/tdf

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