FORT COLLINS: Severe drought in the north western U.S. Corn Belt and meager crop conditions have led to lower expectations for the U.S. corn and soybean harvests, but the trade has recently had a high miss rate on USDA's August projections and the analyst guesses this time have not allowed much room for error.
On average, analysts believe the Department of Agriculture will peg U.S. corn yield at 177.6 bushels per acre on Thursday, below the trend line of 179.5 bpa. The average soybean guess is 50.4 bpa versus the trend of 50.8.
In the last six Augusts, the trade estimates for both corn and soybean yield have been below USDA's forecast. On average in those six years, the trade was 3.4 bpa too low on corn yield and 1.8 bpa too low for soybeans. (https://tmsnrt.rs/2X7QPET)
Not only have the August trade guesses been too light, but they often missed the predicted numbers entirely. USDA's August corn yield fell outside the range of estimates in five of the last seven years, and for soybeans that was true in five of the last six years. If both corn and soybean yields fall within the trade ranges on Thursday, it will be the first time for the August report since 2013.
The probability of a complete miss might be higher this year as the 4.3-bpa range of guesses on corn yield is the narrowest in 20 years. This year's analyst high is 180 bpa and the low is 175.7, though the recent average range for August corn yield is 6.7 bpa.
The trade ideas for soybeans, which range from 49.3 bpa to 51.3, are the narrowest for August in four years. The range has averaged around 2.6 bpa in prior years.
The August corn and soybean yields are formulated differently than in prior months, when they were trend line calculations from USDA's World Board. This month's numbers will be primarily based on producer surveys conducted by USDA's statistics service, and the agency next month will add in field measurements.
It has been uncommon in recent years for August corn and soybean yields to be lower than what was printed in July. That has not happened for soybeans since 2013 but it has occurred once since then for corn, in 2017. There is a tendency for August corn yield to be higher relative to the final yield, which has been the case in 11 of the past 15 years, including the last three.
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