USDA Report Today Another Ouch!
The USDA September Supply Demand Report this morning was another surprise as the USDA raised slightly the national corn and soybean yields. The average trade guess was for the USDA to lower national yields for corn and soybeans. I termed it an ouch. Reading some of the farm forums on agricultural web sites I cannot repeat what many farmers think about the numbers without getting fired!
The average trade guess for corn was a national yield of 167.0 bushel an acre while the USDA projected a yield this month of 169.9 bushel an acre. The average trade guess for beans was 48.7 while the USDA projected a yield of 49.9 bushel acre. By the close today corn was around 5 cents lower while beans were down 10 cents a bushel. Farmers, myself included are having a hard time understanding how the USDA comes up with such high yield estimates given the issues we have seen during the growing season.
Looking at the national crop condition ratings we are much lower than the last couple years in the good to excellent category. The Midwest set a record this year for corn hybrids and soybean varieties needed for replanting. Watching the drought monitor the Dakotas, Montana and much of Iowa are in a drought. Remember Iowa leads the nation in corn and bean production. Most of Indiana and much of Ohio saw very heavy rains early in the growing season.
I understand farmers have the tendency to think the whole Midwest looks "like my back yard." While the corn and soybeans in Minnesota are called the garden spot because our corn and soybeans look good, we are seeing a lot of diseases showing up especially in the beans. The first question one farmer asks another is how bad is your white mold, sudden death and brown stem rot this year? The problem is we can think the USDA is wrong but you have to pay attention to what they say because traders do!