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Analyst expects yield changes in Sept. USDA report

Updated yield forecasts for new crop corn and soybeans are expected in the September USDA report and the chief commodities economist with StoneX Group says “big crops are definitely looking to be the story this year.”

Pre-report yield estimates for corn are between 182 and 183 bushels/acre and soybeans around 53 bushels/acre, close to USDA’s August estimates.

Arlan Suderman says the September yield estimates are the first of the harvest season based on actual field sampling, which leaves room for surprises.

“If USDA comes out with a September estimate close to August, the grain trade will start thinking ‘ok, we have a good idea on the size of this crop’ and they’ll start focusing on the demand side as well as finding enough grain storage for new crop,” he says. “If USDA comes in lower than August, which is possible considering how we finished the season with dryness, then the trade will feel more confident. If it’s a bigger estimate, based on how cool August was, the grain trade will say big crops keep getting bigger.”

And he says yield adjustments provide insight into harvest lows.

“We’re watching two factors: does USDA come in significantly above their August estimate? If they do, it would suggest big crops are getting bigger and will provide more downside risks,” says Suderman. “The other is if they come in similar or lower than the August estimate, they’ll still have to find a home for the crops, which will be more difficult this year.”

Suderman says $10 soybeans and $4 December corn are at pivotal levels.

He says USDA also has elevated demand expectations that could be difficult to achieve this year, especially for soybeans, but global wheat demand might be a bright spot.

USDA’s September Supply and Demand Report will be out Thursday at noon eastern/11 a.m. central.