Good Weather May Lead to Higher US Corn, Soy Harvest in 2017

An improving weather may lead to bigger harvests of corn soybeans in the U.S., even larger than the forecast growth based on the Department of Agriculture’s August Crop Production report. Analysts expect U.S. corn and soybean crop harvests to reach 169.5 bushels per acre and 49.4 bushels per acre, respectively.

The projected harvest for corn represented 298 million bushels higher than the average trade prediction of 14.153 billion bushels, while 4.381 billion bushels of soybean forecast harvest reached 169 million bushels more than the expected average trade.

Good Weather

Improved ratings for soybean crops are a result of recently good weather in Iowa, Illinois and other major production states. This subsequently supported the government’s bearish outlook on prices in early August.

Several industry analysts had expected the USDA to revise its production forecast due to bad weather in the growing season, amid the report exceeding market expectations and causing a decline in market prices.

For farming businesses, the forecast level of production could signal a need for more liquid fertilizer tank fabrications and storage equipment.

Economic Insights

Todd Hubbs, a University of Illinois agricultural economist, said that the USDA made some surprising forecast harvest for some production states. Indiana, for instance, is expected to produce 173 bushels of corn per acre, despite having poor ratings on crop condition.

The forecast remained unchanged from 2016, Hubbs said. Meanwhile, corn production forecasts in Iowa and Illinois are expected to fall 15 and 9 bushels per acre, respectively. The expected yield forecast in North Dakota and South Dakota would decline to 37 and 21 bushels per acre.

Conclusion

Even as the USDA released higher-than-expected figures for corn and soybeans, a favorable weather during August will still be a significant factor. This is particularly true for soybeans, while a possibility still exists for average yield forecasts on both crops not meeting expectations.