They’re not splashing in the green pool or swinging from the parallel bars in Rio, but like their athletic compatriots, American farmers are breaking records.
That’s if you believe the latest numbers from the US Department of Agriculture.
The USDA issued its monthly supply/demand report on Friday. Here are some of the upsets/highlights:
- A 7.1 bushels/acre increase in average corn yield from the July report. The nationwide corn yield average is now forecast to be 175.1 bu/ac, surpassing the previous record of 171 set in 2014. The trade was expecting an increase from 168 bu/ac in July to around 170.
- Total corn production is pegged at 15.2 billion bushels, a new record. The average analyst guess was around 14.8 billion bushels.
- World corn ending stocks are now projected to reach 221 million tons. The trade was anticipating around 213.
- Soybean yield was raised 2.2 bu/ac to a new record of 48.9, with record production of 4.06 billion bushels. Traders expected a yield of around 47.5 with production 3.9 billion.
- The wheat numbers fell within expectations, with domestic production pegged at 2.3 billion bushels with an average yield of 54.9 bu/ac.
Given these numbers, you’d expect corn and soybean prices to be down sharply. Maybe the biggest surprise of all — depending who you ask — was that despite all the bearish numbers, corn futures ended the day in the green. The December contract closed up 1 1/4 cents. And soybeans were only down around 2 cents.
“The old saying is the reaction is more important than the report itself. That reaction certainly doesn’t tell you things are super bearish, when we’ve got carryout numbers the highest in almost 20 years, the biggest production numbers and the market only being down 2 cents,” notes Brian Voth of Manitoba-based Prairie Farm Consulting.
These will likely be the highest yield numbers we see all year, he says.
Brian joined us to chat about the USDA’s corn and soybean numbers, and the market’s reaction:
Stay tuned for more grain market insight in Brennan Turner’s weekly column, on the way later today.