NAPERVILLE, Illinois, Nov 8 (Reuters) - The U.S. Department of Agriculture on Thursday is expected to confirm disappointing yields for the 2023 U.S. corn and soybean harvests, but that may be OK if the freshly printed 2024 outlooks are any indication.
However, Brazil’s soybean and corn crops are up next, and poor weather in the South American exporter could overshadow the headlining U.S. numbers in USDA’s monthly supply and demand report due on Thursday at noon EST (1700 GMT).
On Tuesday, USDA released tables from its annual long-term baseline projections, including the first look at 2024-25, which is especially heavy for corn.
Ahead of Thursday’s report, analysts peg 2023 U.S. corn yield at 173.2 bushels per acre (bpa), up from 173 last month and just below the year-ago result of 173.4. Soybean yield is seen at 49.6 bpa, identical to both last month and last year.
The trade’s idea of corn yield lines up with past similar years. The last two times corn yield also declined in three consecutive months (August-October) were 2022 and 2012, and November yield came in fractionally higher than in October both times.
Other than 2023, the last three times that soybean yields fell in August, September and October were 2008, 2003 and 1999. November yield came in even lower all three times. Ten of 21 analysts polled by Reuters are looking for a smaller soy yield this month.
Crop Watch results generally support these predictions since the 11-field soybean yield ended up close to the season’s lowest score while corn yields bounced a bit at the end.
November yields typically tend to move more versus October than what the trade is expecting, though soybean yield was unchanged in two of the last eight years. November yields deviated by 1% or more versus October in four of the last eight years for both corn and soybeans.
SOUTH AMERICA
Chicago soybean futures have rallied more than 4% so far this month on Brazilian weather worries, as the top state of Mato Grosso battles unseasonably hot and dry weather. However, CBOT December corn has spent the month barely avoiding new harvest lows.
Smaller than expected U.S. yields on Thursday could limit potential losses in corn and soy futures, especially since Brazil’s uncooperative weather is expected to stick around in the short term. But USDA may not weigh in on that this month since it is still early.
It has been 15 years since the agency lowered Brazil’s soy crop between October and November. USDA’s latest for 2023-24 Brazilian soybean output is a record 163 million metric tons, up from the prior year’s high of 156 million.
Some analysts are already getting conservative. Consultancy AgResource on Wednesday pegged Brazil’s soybean harvest at 156.1 million tons, though other outfits believe it is too early to bake in losses.
Interestingly, USDA cut Argentina’s soybean crop in the last three Novembers, and each time it was the correct move. Argentina is still dealing with drought though recent rains have brought some relief. USDA last pegged the 2023-24 Argentine bean crop at 48 million tons.
2024
Without severe crop losses in Brazil’s soy or corn this year, U.S. supplies, especially corn, could balloon in 2024-25. USDA’s tentative baseline tables published on Tuesday are for budgetary purposes and are based on data as of October, though some of the 2024-25 estimates like area factor in current economics.
The baseline figures show 2024-25 U.S. corn ending stocks rising to a 37-year high of 2.6 billion bushels, and the stocks-to-use of 18% would be a 20-year high, up from 14.7% this year.
That is based on 91 million planted corn acres, down from 94.9 million this year, but it uses a potentially problematic trend yield of 181 bpa. Either way, it demonstrates how ample supplies this year are more than likely to translate into next year without some major area or yield disruption.
The soybean picture is less extreme, with 2024-25 ending stocks at 286 million bushels and stocks-to-use of 6.5%. Both would be five-year highs but not too much above recent years.
That relies on a big jump in soy area with 2024 plantings slated at 87 million acres, up from 83.6 million this year, and a record yield of 52 bpa. That area could be possible as new-crop soybean futures are at historically elevated levels versus corn. Karen Braun is a market analyst for Reuters. Views expressed above are her own.
(Writing by Karen Braun Editing by Matthew Lewis)
