USDA Forecast Optimistic Despite Conditions

U.S. farmers are expected to produce a record-high soybean crop this year, according to USDA’s August Crop Production report released Thursday. Soybean production is forecast at 4.38 billion bushels, up two percent from last year, while corn growers are expected to decrease their production by seven percent from last year, forecast at 14.2 billion bushels.

Soybean yields are expected to average 49.4 bushels per acre, down 2.7 bushels from last year, while the average corn yield is forecast at 169.5 bushels per acre, down 5.1 bushels from last year. Yields for both crops are expected to be lower or the same in the major producing areas, but record high in non-traditional states like Mississippi, Pennsylvania, and South Carolina.

But with corn condition ratings the lowest they have been since the 2012 drought, some analysts believe the yields will be lower than USDA is saying now. “It seems like they’re being very conservative with this,” said Doug Werling of Bower Trading during the MGEX crop call following release of the report. “You can’t have a crop condition rating that continues to fall and a yield that improves or only falls marginally two months in a row. It just doesn’t really add up.”

Werling also comments on the wheat production forecast, which is down 25 percent overall.

Audio file: Crop commentary from Doug Werling of Bower Trading

The August report also includes the first production forecast for U.S. cotton, at 20.5 million 480-pound bales, up 20 percent from last year.

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