CME: FCStone Releases Corn and Soybean Yield Estimates

US - The prediction season continued yesterday with the release of corn and soybean yield estimates by FCStone and a yield survey by Reuters.
calendar icon 6 September 2013
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FCStone pegs the U.S. national average corn yield at 156.4 bushels per acre and the soybean yield at 41.2 bushels per acre. Allendale, Inc. announced earlier this week that its yield survey resulted in estimated national yields of 153.4 and 39 bushels per acre for corn and soybeans, respectively.

The results of the Reuters survey appear at right. Several press reports include anecdotal references to “200s” and “mid-200s” for yields in the early-harvested areas of southern Indiana and Illinois as well as good yield reports from the South. Those are indeed encouraging. The caveat is that those are not areas that we depend on for a large portion of the corn crop and are areas that have had better growing conditions this summer than has the heart of the corn and soybean growing region.

Given these estimates, the two biggest factors remaining are a) Acres and b) Frost. Remember that the August Farm Service Agency data for planted acres was substantially different from the >acres in the August World Supply and Demand Estimates (WASDE).

We get another read on acreages in the September 12 WASDE and September 17 FSA release. As for frost, we’ve kicked that one around pretty well already and we can find no short– or intermediate-term temperature outlooks that say a frost is imminent. We suppose that everyone will know about it when it happens.

Slaughter weights are always in important supply factor but they have the potential to significantly impact supplies of both pork and beef this fall. And what’s more, the impact is somewhat unknown due to some unusual factors such as the availability of Zilmax and a vastly different outlook for feed costs this fall.

Hog weights, as measured by barrows and gilts reported under mandatory price reporting (the vast majority of the top butcher hogs!) took a dip last week after growing steadily since mid-July. The upward turn in weights came a bit earlier than normal but coincided with some easing of feed costs and the big rally in cash hog prices that made extra pounds profitable. Last week’s dip could have been caused by hot weather but it seems a bit quick to observe such an abrupt impact. The return of cooler temperatures this week and the coming availability of new crop (ie. more palatable) corn portends a return to higher carcass weights. We still think there is a good chance that weights will exceed last year’s reduced levels by 4 pounds of so as soon as October, adding about 2% for pork supplies in an of themselves. An early frost could, of course, mute that increase due to higher corn prices but it would have to be a big one in terms of severity and area and it would have to come soon.

The cattle situation is quite different primarily due to the Zilmax situation and the fact that LAST YEAR saw the big jump in weights. Even lower feed prices have not kept weights growing so far in 2012 relative to the beta-agonist-induced increases of last year. We still do not expect the suspension of Zilmax sales to have a significant impact on weights since feeders can still use Optaflexx, a product that takes end weights to within 6-8 pounds of those usually achieved with Zilmax. The cattle numbers situation will be a factor as well since the inventory of cattle on feed for 120 days or more as of August 1 was 15% lower than one year ago. Those would be cattle due to come to market, generally, in August and September so yards may have to dig deeply to fill packer needs over the next 30 days, limiting the upward potential for average carcass weights.

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