USDA saves US yield drama for Aug but flags slow soy demand

FORT COLLINS, (Colo.,): The US corn and soybean crops have had a rollercoaster start to the season with extreme dryness followed by ample rains in some areas, though the market will have to wait until next month for direction from the government on yield potential.

Meanwhile, US corn and soybean exporters are capping off what is expected to be a record season, though foreign interest from top importer China has slowed as have recent US shipments.

The US Department of Agriculture on Monday published its July supply and demand report, which is usually relatively calm versus the August update or June acreage survey. The agency this month typically sticks with its trend line yields for US corn and soybeans.

Despite analysts’ predictions for a small yield cut based on poor conditions in the western Corn Belt, USDA left corn yield unchanged at 179.5 bushels per acre and soybeans stayed at 50.8 bpa. For corn that would be a record by 2.9 bpa.

USDA’s statistics agency will publish its first survey-based yield estimates next month, but the inclusion of field measurements will not enter the mix until September.

One factor that raises questions on USDA’s high trend yields is how poorly the spring wheat crop is doing in the Northern Plains. As of Sunday, some 55% of the crop was rated poor or very poor and just 16% was considered good or excellent, the worst ratings on either end since 1988.

USDA pegged US spring wheat production at 345 million bushels, the smallest since 1988 with yield at a 19-year low. North Dakota, Minnesota and South Dakota, which planted 68% of the US spring wheat, are also key corn and soybean growers. The share of US corn and soy plantings in the Dakotas is record high this year at 12.4%.

This will put more pressure on top producers Iowa and Illinois, where record yields might be needed to offset production losses in the northwestern Corn Belt. Some 66% of Iowa corn is rated good or excellent, up 10 percentage points from three weeks earlier, but Illinois dropped 5 points on the week to 60%, a season low.

Iowa notched its record corn yield in 2016 and Illinois did it in 2018. During this week in those years, Iowa corn was 79% good or excellent and Illinois was 81%.