Fundamentally Speaking

Following up on the post where we outlined our thoughts on what 2019 trend yield estimates should be for U.S. corn, this piece examines prospective national soybean yields for the coming season.

The USDA will issue its final crop production report on January 11 and it is expected that less than favorable conditions the second half of the harvest should result in a lower yield than the 52.1 bushel per acre (bpa) figure given in November and may actually fall below the prior record of 52.0 bpa set just two years ago.

USDA will issue their first take on the 2019/20 balance sheets including planted acreage, yields and demand projections at their annual Agricultural Outlook forum in late February.

This graphic shows actual U.S. soybean yields from 1989 with the 2018 number, the November 2018 projection, the 10, 20 and 30-year trend lines and also what the USDA has projected for U.S. soybean yields at their Ag Outlook forum starting in 1998.

In the box we also detail the expected 2019 trend yield and the yield USDA should show in February along with the average annual trend increase for all the time periods.

In recent pieces we have talked about what appears to be an upward paradigm shift in U.S. row crop yields.

One can see from the chart how since 2014, U.S. soybean yields have been quite strong with all five years coming in above the 20 and 30-year trends and including the November 2018 estimate, record yields have been seen four of the past five seasons.

Even including the devastating drought year of 2012, yields over the past ten years have risen at an annual rate of 1.17 bushels per acre, well above the 20-year trend of a 0.72 bpa per year increase, 0.53 bpa for the 30-year trend and 0.45 bpa for the USDA Ag Outlook projections.

If one were to extrapolate the 2019 yield from the 10-year trend, a figure of 52.6 bpa would be expected vs. 50.4 bpa for the 20-year and 48.9 bpa for the 30-year trend.

A trend of the 1998-2018 USDA Ag Outlook soybean yield estimates implies a 47.6 bpa yield estimate but with the past three years at 46.7, 48.0 and 48.5 we feel a figure close to 50.0 bpa will be issued by the USDA this coming February.

(KR)

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