This morning USDA’s World Outlook Board released it’s monthly World Agricultural Supply and Demand report. The report revealed what many expected: a drop in U.S. corn and soybean supplies due primarily to lower yields for both crops. The crop has been hit with extreme heat in many predominant growing areas thus far this summer, which was exacerbated by the delayed plantings meaning the plants were at a critical stage later than normal. Average projected U.S. corn yield was reduced from 158.7 bushels per acre in July to 153 bu/ac this month. Analysts expected a decline to 155.2 bu/ac. Corn harvested acreage was also reduced marginally to 84.4 million from 84.9 last month. Soybean yield is currently estimated at 41.4 bu/ac, down from 43.4 bu/ac in July and lower than pre-report estimates of 42.8 bu/ac. Planted and harvested acreage was reduced for soybeans as well with harvested acreage now at 73.8 million.
Keep in mind this month’s projections are the first to use field data from the current crop as opposed to the historical trend (yields from 1990-2010 for corn and 1989-2009 for soybeans were used in prior estimates).
The reduction in supply for these crops was slightly offset by projected decreases in demand. Corn feed, ethanol, and export demand was lowered as were soybean crush and export use for the 2011 crop.