Gro’s yield models proved particularly prescient as the USDA’s WASDE report increased its corn and soybean estimates to essentially match the Gro predictions.
In its October WASDE report, the USDA raised its corn yield estimate to 176.5 bushels per acre, up slightly from a month earlier, and its soybean yield to 51.5 bu/acre. Those revised numbers are nearly identical to Gro’s projections of 176.6 bu/acre for corn and 51.6 bu/acre for soybeans, estimates that Gro’s yield models first began forecasting in early September.
With the US crops now mature, the October WASDE estimates are a reliable indicator of final yields. In the past five years, the October report on average has been 1.3 bu/acre above the final yield for corn, and 0.3 bu/acre higher than the final soybean yield.
The revised yield pushes US corn production up to 15.019 billion bushels, the second-highest level on record after 2016. The USDA lowered its estimate for corn use in feed and residual demand, but increased its estimate for export demand.
Fundamentally, corn export prospects should favor the US, but shipping costs remain high and Gro expects China’s import demand will drop in 2021/22 to below current USDA forecasts, as Gro wrote about here.
Still, recent heavy rains in China’s corn regions could impact crop quality — though not the quantity, as shown by Gro’s China Corn Yield Forecast Model — and spur renewed import demand in coming months. Monitoring China’s crop conditions for the remainder of the season will be critical for 2022 balances.
For soybeans, the WASDE estimate suggests production of 4.448 billion bushels, the highest level ever posted. That, coupled with a higher soybean stocks estimate reported Sept. 30, alleviates price pressure on the US soy complex. Gro’s calculated soybean stocks-to-use ratio has eased to 7.3%, indicating a considerable loosening of supplies compared with a month ago.
Gro’s US Soybean Yield Forecast Model has long suggested that the USDA estimate was too low, as strong yields in the Western Corn Belt along with Wisconsin would require an upward revision by the USDA.