Fundamentally Speaking

For the second month in a row the USDA surprised the trade by issuing a 2017 U.S. soybean yield forecast above expectations as they hiked the national yield by 0.5 bushels per acre (bpa) to 49.9 bpa vs. the average trade guess of 48.6 bpa.

This is below last year's record of 52.1 bpa but the second highest ever though in light of dryness in some of the key soybean producing states over the course of the growing season this new yield forecast is viewed skeptically by some.

As part of its crop production briefing the USDA did release a graphic showing the soybean objective yield region, which indicates the number of pods per an 18 square foot area vs. the implied soybean pod weight.

From the graphic, it appears that the number of pods for the 11 objective states (which include AR, IL, IN, IA, KS, MN, MO, NE, ND, OH, and SD) is 0.34 grams per pod.

This is the highest ever, yet the number of pods within this 18 square foot area looks to be around 1,678, which would be the fourth lowest figure since 2004.

Due to excess wetness in the spring, dryness in the Plains and Western Corn Belt for July and similar conditions for the Eastern Corn Belt last month and now continuing into September we have heard reports that soybean plants are shorter than normal, have few lateral branches and in general have less pods than normal.

Due to the dry conditions especially in Iowa and Illinois over the past two months with many areas in the two largest soybean-producing states having less than 50% of their normal precipitation it is thought that this compromised how heavy each bean is within the pod.

Given the USDA projection, it may be that the soybean plant is compensating for fewer pods per plant by having the individual beans heavier.

The accompanying graphic shows the weighted number of soybean pods per 18 square foot area, the implied pod weight (grams/pod) and the weighted soybean yield for 11 objective soybean states.

The USDA does list a formula for deriving the implied pod weight, which is the published yield/pods/0.0889.

The USDA in its crop production report indicated the 11 state number of pods within the 18 square foot area was 1,678.

The 11 state weighted yield based on harvested acreage is calculated to be 50.7 bushels per acre.

Using the formula 50.7/1678/0.0889 = 0.3399 or about 0.34 grains per pod.

This is far above the year ago 0.3257 weight when the percent of the crop rated good to excellent is 59% this year vs. 73% a year ago and weather was much more conducive to excellent yields a year ago vs. this season.

Hence, those feeling that the October and November soybean yield projections will come down must feel that the USDA's implied pod weight is far too high.

(KA)