Do not believe grain forecasts like these
Agriculture-advisory firm Pro Farmer, which this past week led dozens of traders, grain buyers and farmers on a tour of Midwestern corn and soybean fields, on Friday projected an average national corn yield of 120.25 bushels an acre and total output of 10.478 billion bushels.
The U.S. drought this year, by some estimates the worst since the 1950s, has stunted crops from Ohio to Nebraska and sent grain prices soaring over the summer. Now, as farmers start to harvest corn, traders are closely watching any clues on just how low the national yield will be.
Pro Farmer's estimates of corn production are below the U.S. Department of Agriculture's forecasts this month for a corn yield of 123.4 bushels an acre, which would be the lowest since 1995, and production of 10.78 billion bushels.
Pro Farmer also forecast U.S. soybean production will fall 14.9% to 2.60 billion bushels, with an average national yield of 34.8 bushels an acre.
The figures are below the USDA's forecast this month for production of 2.69 billion bushels and a yield of 36.1 bushels an acre.
Pro Farmer's forecasts were based on the results of its seven-state crop tour and other factors, such as its expectations for crops in regions that weren't surveyed on the tour, such as Southern Illinois.
Estimates released by the crop tour earlier in the week drove futures prices higher. Front-month corn futures closed Tuesday at a record $8.3125 a bushel, as the tour estimated poor yields in Ohio and South Dakota.
Futures then eased on Wednesday and Thursday, partly because the tour moved on to states like Minnesota and Iowa with generally healthier crops.
Pro Farmer's national forecasts for corn confirmed analysts' expectations for a smaller crop, while the soybean forecasts were even lower than some analysts had expected. That could push up corn and soybean futures when electronic trading reopens Sunday evening, traders said. The Pro Farmer estimates came out after markets closed Friday.
"The corn was supportive, but I think beans are really the eyepopper here," said Mike Zuzolo, president of advisory firm Global Commodity Analytics & Consulting in Lafayette, Ind.
Corn stalks in some fields surveyed on the tour were so weak that wind threatened to topple the plants. That is why Roger Gronewald, a 75-year-old farmer, started harvesting corn with his son on their 700 acres on Aug. 13, the earliest he had ever done so...
Source: Argentine Beef Packers S.A.