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Nov. 9 USDA Report

Written by: Kent Thiesse

The USDA Report released on November 9 increased the estimated total soybean production in 2012 to 2.97 billion bushels, which is 4 percent above the 2.86 billion bushel estimate in October. The 2012 soybean production estimate is still 4 percent lower than the 2011 U.S. soybean production of 3.09 billion bushels, and 11 percent below the 2010 production level of 3.33 billion bushels. This production increase is a fairly major production adjustment for this late in the year.

 

The reason for the increase in expected U.S. soybean production by USDA was a surprising increase in the expected average U.S. soybean yield for 2012. USDA is now estimating the average soybean yield at 39.3 bushels per acre, which compares to 37.8 bushels per acre in the October USDA Report. USDA credits the 1.5 bushel per acre increase to some very favorable growing conditions in the Eastern Corn Belt late in the growing season. The 2012 expected national average soybean yield is still well below recent average yields of 41.9 bushels per acre in 2011, 43.5 bushels per acre in 2010, and the record U.S. soybean yield of 44.0 bushels per acre in 2009.

 

The latest USDA Report left the expected U.S. corn production for 2012 almost unchanged from the October estimate, with total corn production now estimated at 10.7 billion bushels.  This compares to USDA corn production levels of 12.36 billion bushels in 2011, 12.45 billion bushels in 2010, and 13.1 billion bushels in 2009. The projected total 2012 U.S. corn production would be the lowest since 2006. USDA is estimating that the 2012 average corn yield in the U.S. will be 122.3 bushels per acre, which is up slightly from the September yield estimate of 122.0 bushels per acre. The current 2012 corn yield estimate would result in the lowest national corn yield since 1995. The 2012 corn yield estimate compares to recent U.S. corn yield levels of 147.2 bushels per acre in 2011, 152.8 bushels per acre in 2010, and the record U.S. average corn yield of 164.7 bushels per acre in 2009.

 

Given the increase in the national soybean yield in the November USDA Report, compared to the October Report, it was kind of surprising that USDA left the estimated 2012 soybean yield for Minnesota unchanged from the October Report. USDA estimates the 2012 Minnesota soybean yield at 43 bushels per acre, which is an increase of 4 bushels per acre from the 2011 Minnesota soybean yield of 39 bushels per acre, but is still below the State record soybean yield of 45 bushels per acre, set in 2010. USDA increased estimated 2012 soybean yields in Iowa, Illinois and Indiana by 1 to 4 bushels per acre in the November Report, compared to the October Report. The 2012 Iowa soybean yield is now estimated at 44 bushels per acre, compared to 51.5 bushels per acre in 2011. Other projected State soybean yields for 2012 are Illinois at 43 bushels per acre, Indiana at 44 bushels per acre, Nebraska at 41 bushels per acre, and South Dakota at 28 bushels per acre, all of which are below final 2011 yields.   

 

Based on the November 9 Report, USDA is estimating the 2012 corn yield in Minnesota at 168 bushels per acre, which is an increase of 12 bushels for acre from the 2011 Minnesota corn yield of 156 bushels per acre, but is still well below Minnesota’s record average corn yield of 177 bushels per acre in 2010. USDA is projecting Iowa to have a 2012 corn yield of 139 bushels per acre, which compares to a final yield of 172 bushels per acre in 2011, and a state record corn yield of 182 bushels per acre in 2008. Illinois is now projected to have a drought-reduced 2012 average corn yield of 101 bushels per acre, compared to 157 bushels per acre in 2011. Estimates call for Indiana to have a 2012 average corn yield of 100 bushels per acre, compared to 146 bushels per acre last year, and for the 2012 Nebraska corn yield to be 139 bushels per acre, compared to 160 bushels per acre in 2011. The South Dakota corn yield for 2012 is estimated at 94 bushels per acre, compared to 132 bushels per acre in 2011.

 

USDA  SUPPLY  AND  DEMAND  REPORT

The monthly USDA Supply and Demand Report released on November 9 was basically unchanged for corn market prices and slightly “bearish” for soybean market prices in the coming months. USDA is now estimating 2012-2013 U.S. corn carryover stocks at 647 million bushels, which is was an increase of 28 million bushels from the October estimates. The projected 2011-2012 corn carryover at under 1 billion bushels remains extremely tight, which will likely to keep continued strength in the corn market. The next big factor for the corn market will likely be the anticipated planted corn acres in the U.S. for the 2013 growing season.

 

Based on the November USDA Report, soybean ending stocks for 2012-2013 are expected to be 140 million bushels, which is an increase of 10 million bushels from the October estimate. The increase in estimated ending stocks in the November Report was fairly minimal, due to increased estimates for U.S. soybean exports and higher soybean crush levels for the coming year, which somewhat offset the significant increase in the soybean production level projected by USDA. Depending on the current growing season in South America, there seems to be growing evidence that soybean stocks are on a slight increase, which could pressure the soybean markets a bit in the coming months.

 

USDA is currently estimating the U.S average cash corn price for 2012-2013 in a range of $6.95 - $8.25 per bushel, or an average of $7.60 per bushel, which is down $.20 per bushel from the October estimated average price. USDA is projecting the U.S. average soybean price for 2012-2013 in a range of $13.90 - $15.90 per bushel, resulting in an average soybean price of $14.90 per bushel, which is a decrease of $.35 per bushel compared to the October estimate. By comparison, the USDA estimated average prices in November of 2011 were $6.70 per bushel for corn and $12.60 per bushel for soybeans. It is important to remember that the 2012-13 USDA price estimates are the expected average prices from September 1, 2012 to August 31, 2013, for the 2012 crop year, and are not estimated prices for the 2013 crop year.