Update for October 14th, 2021
The USDA WASDE and Crop Production reports released on Tuesday were bearish to both corn and soybeans relative to expectations.
The USDA estimates the 2021 average corn yield at 176.5 bushels per acre, only slightly lower than the all-time high set in 2017 of 176.6 bushels per acre. 2021 corn production is forecast to reach 15.019 billion bushels for the year, a 6% increase over last year. Bottom line, this raises the U.S. ending stocks for 2021/22 to +92 million bushels. The season average corn price was left unchanged at $5.45 per bushel.
2021 soybean production is projected to be the largest U.S. soy crop ever, up 2% from the previous estimate. Total production of 4.448 billion bushels is expected this season which tops the record set in 2018 by 22 million bushels. The estimated average yield of 51.5 bushels per acre is the second largest in history. Record high yields are projected in several states with Iowa and Illinois leading the nation with a combined soybean production total of 1.29 billion bushels. Most of these bushels are expected to be utilized by the arrival of the 2022 crop with almost 50% of the bushels produced here in the U.S. exported to other nations around the world. The USDA reduced their season average price outlook by $0.55 per bushel down to $12.35. This price, while lower than we have seen over the past few months, is the highest in 7 years.
Earlier this week the U.S. corn harvest was estimated to be 41% complete up from 29% the previous week vs the average of 31%. Almost every major corn production state is running ahead of normal harvest progress, with the exception of Ohio, Kentucky, Tennessee, North Carolina and Pennsylvania. Soybean harvest is also ahead of average with 49% harvested this week vs 34% one week ago vs the average of 40% by this date.
U.S. Energy Secretary Jennifer Granholm told Brownfield to expect an increase in the production of biofuels used to produce Sustainable Aviation Fuels as new infrastructure is built to support it. “Airplanes and ships are so much heavier than vehicles, they’re much harder to run on batteries. So, the President’s Build Back Better Agenda contemplates improved tax credits for biofuels, including Sustainable Aviation Fuels.” Granholm says that to reach the targeted 35 billion gallons of SAF’s by 2050 will require the building of more than 200 new biofuel refineries, increasing the ethanol market for farmers. “It means jobs, it means an increase in production, which obviously keeps them in business.” The presidents Build Back Better plan requires that billions of dollars be spent on climate research development projects which includes the use of biofuels. Granholm calls the commitment an “exciting opportunity” for both jobs and income potential in agriculture.
The forecasted precipitation totals over the next week are shown in the first map below.
GFS and EURO models through next Friday, October 22nd.
AgRural, an Brazilian agribusiness consultancy reported Monday that farmers in Brazil had planted 10% of their estimated 2021/22 soybean area as of October 7th this is a 6% increase from the previous week and is 7% higher than this same week a year ago. Much needed rainfall has boosted planting progress in a large portion of the country with the major grain producing states of Mato Grosso and Parana ahead of the other states in planting progress. The countries first corn planting for the season has now reached 38%, a 5% increase over the previous week and near last year’s total of 39%. Excessive humidity hurt the planting progress in southern Brazil. (Reuters)
Brazil started the growing season with widespread drought conditions but rainfall has returned over the last couple of weeks over much of the country and weather outlooks suggest these rains will continue. Rainfall during this part of the season is normal and necessary and given current forecasts along with the added acres and planting progress the potential is definitely present for Brazilian farmers to grow record corn and soybean crops this season.