Friday, September 30

USDA’s record US soybean yield chasing 2021, not 2016 -Braun


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NAPERVILLE — Historically tight soybean stocks and smaller-than-expected plantings of the oilseed would require a huge US crop yield to prevent supplies from shrinking even further into 2023.

The US Department of Agriculture delivered that big number last Friday, predicting US soybean yield to tie 2016’s record and topping almost every analyst forecast.

Drier weather across the United States has threatened crop yields this summer, particularly in the western Corn Belt. For soybeans, strong rainfall in August often leads to bumper harvests, though it remains to be seen whether the recent and expected rains can put 2022 in the record books.

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Although USDA’s soybean yield of 51.9 bushels per acre matches the 2016 result, weather has not been similar. July-August 2016 was the wettest such period in the US Midwest in 127 years of records, with 147% of normal precipitation.

July-August 2016 was top 10 wettest for North Dakota and Kansas and just above average in Nebraska and South Dakota, about as widespread and abundant as summer rainfall can be across the main US growing region.

Before rains began on Monday, rainfall across Iowa since July 1 was only about 80% of normal, about two-thirds normal in eastern Nebraska and Kansas, and about three-fourths of normal in crop-heavy eastern North Dakota. Eastern state totals were above normal, except central Illinois lagged with 90%.

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That has pushed crop conditions below normal levels with soybeans at 58% good or excellent as of Sunday versus 57% in the same week last year and 72% in 2016.

SEE 2021?

The weather comparison reads as if 2022 and 2016 yields cannot possibly be the same, but 51.9 bpa in 2016 was far more impressive at about 8% above the long-term trend. Today, that yield would be above trend by just over 1%, the same as last year, where yield notched a second-best 51.4 bpa.

Trend calculations vary among analysts so there may be some room for debate, but the calculations imply USDA predicts a similar result to 2021, not 2016. Farmers have six more years of growing soybeans under their belts, and seed genetics have come a long way in that short time.

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But 51.9 bpa is still an incredibly strong yield and cannot be taken for granted. Rains that fell across parts of the Western Belt on Monday and Tuesday in some cases may have been crop-saving, though other areas still wait for replenishment.

The three or four weeks before the latest rounds of rains were particularly dry in many key areas, so it is unknown if any irreversible damage such as pod abortion occurred in that stretch. That could potentially come out next month when USDA takes field measurements, including pod counts.

July through mid-August 2021 was similarly dry in some of the previously mentioned states, though the second half of August was very wet across the Western Belt. USDA in August 2021 pegged soy yield at 50 bpa, though September came in at 50.6. By October, the 51.5 forecast was very close to the eventual final.

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The opposite happened in 2020, when the August soy yield of 53.3 bpa dropped to 51.9 the next month after an extremely dry August, the third-driest on record in Iowa, for example. Final was even lower at 51, still respectable.

Rain opportunities still exist this week in some parts of the parched Western Belt, but many of these areas may remain overall drier than normal through the end of the month. If that trend starts materializing, the 51.9 scenario could be out of reach. Karen Braun is a market analyst for Reuters. Views expressed above are her own.

(Writing by Karen Braun Editing by Matthew Lewis)

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