USDA unexpected soy yield cut causes price shock
USA— The USDA’s September World Market and Trade reports unexpectedly cut projected corn yields 2.9 bushels per acre, and soybean yields by 1.4 bushels per acre, causing soybean prices to escalate to 76 cents per bushel while corn prices neared US$7 per bushel.
The U.S. now expects to produce its third-smallest corn crop in 10 years, according to James Mintert, director of the Center for Commercial Agriculture at Purdue University.
But while a smaller corn crop was expected on account of hot, dry weather, Mintert said it was the cuts to the soybean crop — backing away from what was expected to be a record year for soybean production — that came as a surprise.
Soy farmers who spoke during a recent U.S. Soy Export Council webinar indicated they got a late start to planting this year, suffered from irregular rains, and in some cases lost crops to severe wind and weather events.
Field surveys determined that pod counts in U.S. soybean fields are down nearly 7% to the lowest level seen since 2019, according to Randy Mittelstaedt, head of market insights for R.J. O’Brien.
Soy farmers who spoke during a recent U.S. Soy Export Council webinar indicated they got a late start to planting this year, suffered from irregular rains, and in some cases lost crops to severe wind and weather events.
Prices for both commodities cooled in the week after the report, losing about half of the gains posted in the immediate aftermath. And it remains uncertain where corn and soybean prices will fall as the harvest begins.
Nathan Thomson, an associated professor in the Department of Agricultural Economics at Purdue, noted that statistical analysis could put corn prices anywhere from US$6 to US$7.50 per bushel next March, while soybeans could experience even greater volatility because the U.S. exports nearly half of its soybean crop.
But so far high prices and reports of a smaller crop in the U.S. have spurred rumors of a significant expansion of cropland in South America, which has offset some of the losses in the U.S.
In Brazil, despite problematic weather conditions, the soybean crop performed slightly better than expected. Post revised up the forecast for 2022/23 soybean production to 144 million metric tons (MMT), based on a yield of 3.39 MT per ha. The estimate was raised, as Brazil has managed to secure sufficient fertilizer supplies.
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