USDA is projecting the 2015 U.S. corn crop will be down half a billion bushels from last year’s record 14.22 billion, the National Agricultural Statistics Service said today. The smaller corn crop was just one of several items of potentially bullish news in the August Production Report.
But the future markets didn’t see it that way, selling off nearby and more distant corn and soybean futures contracts not long after the report’s release. September corn finished down 19 and ½ cents and August soybeans down 63 cents on the day.
NASS said corn growers are expected to harvest an average of 168.8 bushels per acre, which would be down 2.2 bushels from 2014. With harvested acreage falling from 2014’s 83.14 million acres to 81.1 million, farmers would be expected to produce a crop of 13.69 billion bushels.
Soybean production is forecast to fall 1 percent to 3.92 billion bushels in 2015, based on an average yield of 46.9 bushels, down 0.9 bushel from 2014. Cotton is projected to be down 20 percent to 13.1 million bales and rice down 16 million hundredweight to 205 million hundredweight.
Production of grain sorghum, which saw the biggest percentage acreage increase of any crop (11 percent) last spring, is expected to reach 572 million bushels, a 24 percent increase from 2014’s 432 million bushels.
Although the 500-million bushel decline in corn production was more than 4 percent of the total for 2014, the 2015 crop, if realized, would still be the third largest on record for the U.S. The 168.8-bushel projected yield would be the second highest ever, according to NASS.
The problem was commodity traders were expecting a reduction from the July forecast, which, unlike the August crop production report, was based on trend yield estimates. The August report was based on survey responses on crop conditions as of Aug. 1.
Between the July and August reports, USDA raised the corn yield projection from 166.8 bushels to 168.8 and the soybean yield from 46 bushels to 46.9. That resulted in production numbers that were not as low as some analysts expected.
Unusually heavy rains in Midwest states including Missouri, Illinois, Indiana and Ohio were thought to have led to declines in corn and soybean production along with the reduced planted acreage from 2014.
Ironically, at the same time USDA’s NASS was raising the national yield estimates, the Agriculture Department was also issuing disaster declarations for a number of counties that have been hit by heavy rains in each of those states.
Forecast yields for the Mid-South states would still be high with that for Arkansas reaching 195 bushels per acre, up from 187 bushels in 2014. Arkansas’ corn crop would be down 7.5 million bushels from 2014’s 99.1 million because harvested acreage is expected to decline 60,000 acres.
September Chicago corn futures fell 16 cents a bushel following the crop production report’s release. Most markets were still recovering from China’s announcement on Tuesday it was devaluing the yuan.
August Chicago soybeans fell 56 cents per bushel, again, due, in part, to currency fluctuations following the news from China.
USDA said the 2015 U.S. wheat crop is expected to total 2.14 billion bushels, down slightly from the July forecast but up 5 percent from 2014. Winter wheat is forecast at 1.44 billion bushels, down 1 percent from USDA’s July number but up 4 percent from 2014.
For more on USDA’s first survey-based look at 2015 U.S. crop production, visit http://www.nass.usda.gov/Publications/index.asp.