MCHENRY, Ill. — A producer-based survey across the nation’s primary corn and soybean states estimates yields below the August U.S. Department of Agriculture projections.
Allendale Inc. released the results of its 34th annual survey conducted Aug. 21-Sept. 1 and projects the U.S. average corn yield at 171.51 bushels per acre and soybeans at 49.58.
USDA’s August estimates had the national average corn yield at 175.05 bushels per acre and soybeans were projected at 50.85.
The survey was conducted by Allendale brokers, as well as via its website and social media platforms. These estimates were based on producer-calculated yields in 25 states.
For this survey, the smaller-producing states were assumed using USDA’s Aug. 11 estimates. Harvested acres were assumed using the August estimates.
“Ample surveys gave us the numbers needed to project yields in 12 states. This covers 86% of corn production and 82% of soybean production,” said Rich Nelson, Allendale chief strategist.
“We have taken a little yield off compared to USDA and that’s not unusual for a USDA’s September report either. We’ve been within one bushel of USDA’s September estimate nine of those 15 years in our survey. When we are off a little bit in our survey, we’re generally too low.”
The survey pegged the Illinois yields at 199 bushels per acre for corn and 59 for soybeans, compared to USDA’s August estimates of 201 and 62.
Indiana’s average yields in the survey were 193 and 57, while USDA projected 195 and 60 last month.
The survey had Iowa’s yields at 199 and 56. USDA’s August estimates were 203 and 58.
USDA’s corn yield estimate last month of 175.05 was 3.6% below the trend yield. Allendale’s 171.51 average yield is 5.5% below trend.
“Weather is what deviates yields from that starting trend above as well as below. Our 171.51 yield may be the largest yield cut from trend since going back to the major drought of 2012. Of course, this is not a 2012 comparison. We’re simply making a note that this is the steepest cut from starting trend since that year,” Nelson said.
“The issue for corn is very clear this year. It’s not whether yield will decline or whether there’s problems. That’s not an issue at all. In fact, that’s the minor consideration. The major consideration is have we changed the narrative for 2023.
“The story is a supply increase story that was laid out in November through January by many private market analysts and by USDA in its February conference. Keep in mind we do have a good increase in corn acreage this year and as it stands right now we’re playing with yields quite similar. The issue is we’re also additionally starting out with higher beginning stocks.”
The total corn supply for the 2022-2023 marketing year was 15.1 billion bushels.
“Even with our own yield cut, we’re now at 16.3 billion bushels. So, we still have a supply increase narrative in place for this discussion,” Nelson said.
“USDA has ending stocks of 2.202 billion bushels and Allendale’s estimate is 1.967 billion, which is still bearish.”
USDA’s average soybean yield in the August report was 50.85 bushels per acre compared to Allendale’s 49.58.
“This is always a tougher issue as far as soybean yield determination in the month of August. We have been within one bushel of USDA’s number in six of the past 15 years, but I do find it interesting that our survey is generally a little too low compared with USDA’s report in September,” Nelson said.
“I’m not going to make any claims that we’ll be within one bushel of USDA. We do have our light yield cut, but at this point it’s still not quite showing up in the numbers to make a very steep type of yield cut.”
USDA reduced its soybean yield estimate in August 2.2% below its starting trend yield.
“Our number is 5.5% below starting trend. As with corn, this would be the steepest yield cut for U.S. soybean yield since 2012,” Nelson said.
“We don’t generally get steep yield hits in soybeans even in drought years. You’re looking at maybe 9% to 15% in drought years. You don’t get that 25% yield hit like we saw in corn in 2012, as well as in 1988 and prior droughts.”
“Soybeans are just a little different than corn where we don’t have this massive supply chain narrative, which is more or less set in stone, so to speak,” Nelson said.
“The issue with soybeans is we still have quite a flexible balance sheet, and while we do have a lot of concern about export sales and we would suggest there’s some good hits coming on these numbers.
“Maybe 50 million bushels, maybe even up to 100 million bushels in the coming months, not on the September report, but in coming months. So, until that’s recognized, we still have a balance sheet which looks quite flexible.”
Ending stocks of 200 million bushels implies future prices around $14 per bushel.
“So, the idea that we’re going to move ending stocks from 246 million bushels that USDA had last month down to our estimate of about 170 million bushels I think that’s very reasonable for our discussion point for the upcoming September report,” Nelson said.
“Now, as a reminder, we’re not going to go to plus-$14 futures too aggressively, though, mainly because this market has its own private view that exports are a problem, and whether USDA recognizes that or not is a separate discussion.
“But for now, we’re saying for this report we can maybe see ending stocks just under 200 million bushels and then in the coming months we may see numbers pushed back above 200 million.”
The survey also asked producers their current status with old crop and new crop sales. The survey found 97% of the old corn crop was sold, matching last year, and 28% of new corn crop has been sold compared to 32% in 2022. It was 35% in 2021.
“That’s not too surprising. A lot of producers, especially those in the western Corn Belt, were a little resistant on getting strong hedges applied at those higher prices,” Nelson said.
Survey respondents indicated 95% of their old crop soybeans were sold, 3% below each of the last two years, and 29% of new crop soybeans were sold, 5% below 2022.
“This is a pretty good soybean hedging rate,” Nelson said.