Fundamentally Speaking

Corn Output, Stocks Drop Sharply

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst
Chart by Joel Karlin, DTN Contributing Analyst

If you had said back in June that the U.S. would set a new corn yield record at 178.4 bpa and beans would tie their record high at 51.9 bpa, you may have thought as of October 14 prices could be a lot lower than the $4.04 high scored today by December 2020 corn and the $10.73 recently posted by November 2020 soybeans.

USDA crop production forecasts for both corn and soybeans have dropped dramatically over the past WASDE reports starting from June not on falling yields but an unprecedented drop in planted and harvested acreage from what was originally reported back at the end of March.

One would think after the surprise June acreage report losing 5 million acres of corn, the Farm Services Agency indicating more prevented planting area than had been thought and the drought and derecho damage that has further pared harvested area that should be about it.

As for yields, they are still record high and this could result in increases in yield estimates over the next two crop reports which would be entirely in pattern seen from recent years.

This graphic shows the change in U.S. corn planted and harvested area in million acres and ending stocks in billion bushels (bb) on the left-hand axis vs. the change in yield in bushels per acre (bpa) on the right-hand axis from the USDA's June to October WASDE reports.

Note the 6.0 and 7.1 million acre declines in planted and harvested acreage from the June to October WASDE reports are easily the largest of the past ten years.

With yields essentially unchanged, this has resulted in an output decline of 1.233 bb, the second largest June-October decline the past ten years, but note all the other years of large tumbles in output such as seen from 2010-2012 were due to falling yield projections.

Ths along with the 175 million bushel (mb) increase in export estimates since June, offset by a 400 mb loss in domestic usage has resulted in the 2020/21 carryout falling by 1.156 bb trailing on the June-October 2012 1.262 bb drop.


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