Bin-busting year for corn and soybeans?

If weather continues to cooperate through August and into September, this year’s corn and soybean harvests could both be bin-busters. The production forecasts for all major grains except rice went up, according to the U.S. Department of Agriculture’s Aug. 20 World Agricultural Supply and Demand Estimates.

The report noted, “This month’s 2020-21 U.S. corn outlook is for larger supplies, greater feed and residual use, increased exports, and higher ending stocks.” Corn production is forecast at 15.3 billion bushels, up 278 million bushels from the July projection. The season’s first survey-based corn yield forecast, at a record 181.8 bushels per acre, is 3.3 bushels higher than last month’s trend-based projection.

The marketing year average price estimate for corn was $3.10 per bushel, the lowest since 2006, versus $3.60 for the 2019 year.

Storm damage not factored in

The report predicts that Illinois, Indiana, Iowa, Missouri, Nebraska and Ohio will have corn yields above a year ago, with record-high yields expected for Minnesota and South Dakota. The report came out just before storms with damaging straight-line derecho winds slammed into the Midwest, reportedly affecting up to a third of Iowa cornfields. Unofficial reports have suggested that up to 10 million acres, or about a third of Iowa’s 30 million acres, may have sustained some damage. Field visits to Iowa fields by USDA inspectors will determine how any storm damage will affect the next report.

The USDA is also forecasting a strong export rebound of 2.73 billion bushels, up 24% from last year, and 2.1 billion bushels for corn, up 25% from last year. Some experts are calling this forecast optimistic and caution that it depends on the actions of China and other export destinations. China has made some big corn and soybean buys from the U.S. recently and says it intends to live up to the Phase One deal despite tensions over other matters.

Chinese media have lately been conducting a campaign against food waste, which could be a sign that reserve stocks are tightening. But China has also recently claimed to have found the coronavirus on food packaging of imported food, which led the World Health Organization to issue a statement saying there is no evidence of the virus being transmitted through food or food packaging.

Soybeans up

Soybean production is forecast at 4.425 billion bushels, up 290 million bushels on higher yields. The harvested area is forecast at 83 million acres, unchanged from the July projection. The first survey-based soybean yield forecast of 53.3 bushels per acre was raised 3.5 bushels from last month and is 5.9 bushels above last year’s level.

The U.S. season-average soybean price for 2020-21 is forecast at $8.35 per bushel, down $0.15 cents from last month. The soybean meal price is forecast at $290 per short ton, down 10 dollars. The soybean oil price is forecast at $0.30 cents per pound, up $0.01.

According to the WASDE, soybean supplies for 2020-21 are projected at a record 5.1 billion bushels, up 13% from last year. U.S. soybean exports were raised 75 million bushels to 2.13 billion on increased global import demand, increased supplies, and lower prices. Soybean crush is also raised, reflecting increased soybean meal exports. Soybean ending stocks are projected at 610 million bushels, up 185 million from last month. Jim Mintert, director of the Center for Commercial Agriculture at Purdue University, said the season could see carryover of 19% into 2021, which would be the largest carryover since 2004.

Those and other forecasts were discussed by Mintert and a panel of experts at Purdue University’s Panelists Crop Production Report. Normally given as part of the Indiana State Fair, it was presented remotely this year due to the coronavirus, which has canceled most state fairs. Bob Nielsen, Extension corn specialist and professor of agronomy at Purdue University, said the keys to finishing this year’s corn crop will be adequate rainfall, enough sunshine, an adequate crop canopy, continued low levels of foliar disease and no more major storm damage.

Shaun Casteel, associate professor of agronomy at Purdue and Extension soybean and small grains specialist, said this year’s soybean crop forecast could be among the biggest ever. An average nationwide yield of 61 bushels per acre—8 bushels above trend—means that some fields could yield in the upper 80s, he said. Iowa’s forecast is 58 bushels per acre, with 58 for Ohio and 64 for Illinois. Casteel credited the yields to excellent planting progress in late April and early May and favorable summer weather but reminded attendees of his father’s saying: “August makes or breaks soybeans.”

Wheat and sorghum

Sorghum production was forecast 44 million bushels higher, with the yield 9.1 bushels per acre above last month’s historical median yield. Sorghum export estimates were raised, reflecting an increase in the expected number of shipments to China.

The August outlook for 2020-21 U.S. wheat is for increased production offset by lower imports, higher exports, and lower ending stocks. U.S. wheat production was raised 14 million bushels to 1,838 million as increased hard red spring and durum production more than offset lower winter wheat production as indicated by the NASS Aug. 12 Crop Production report.

Indiana producer sentiment

Purdue’s Michael Langemeier said Indiana net farm incomes were slightly above 2015 levels, but not much, even with government payments averaging $60 per acres of corn and soybeans. Surveys of producer sentiment in west central Indiana show optimism about crop conditions, but pessimism about prices and the future. Low returns from crops compared to cash rental rates were expected to put downward pressure on Indiana rental rates for next season.

The Aug. 20 WASDE is available at https://www.usda.gov/oce/commodity/wasde.

David Murray can be reached at [email protected].