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123-bushel corn, 36-bushel soybeans -- USDA

Jeff Caldwell 08/10/2012 @ 8:04am Agricultural content creator and marketer.

Coming in slightly below earlier analysts' estimates, USDA pegged this year's drought-shortened corn and soybean crops to yield 123.4 bushels/acre and 36.1 bushels/acre, respectively, in its monthly Crop Production report Friday morning.

That will yield a 10.8-billion-bushel corn crop and a 2.69-billion-bushel soybean crop, according to USDA's estimates.

USDA's corn and soybean yield and harvested acreage estimates released Friday morning were lower than many analysts expected. They fell in the range of expectations, but on the low side. So, what's it mean moving forward?

In the agency's first report of the summer using actual field yield tallies rather than only farmer survey work, USDA estimated 123.4 bushels/acre for corn yields and 36.1 for soybeans. That's going to yield a 10.8-billion-bushel corn crop and a soybean crop of around 2.69 billion bushels, Friday's Crop Production report showed. As of now, that's based on harvested acreage figures of 87.4 and 74.6 million acres for corn and beans, respectively, both down slightly from the June acreage estimates.

The trade's response will likely be a mixed bag, says Jason Roose of U.S. Commodities in West Des Moines, Iowa. Friday's numbers indicate the lowest carryout for corn since 1996, but usage fell; feed usage was cut by 725 million bushels and ethanol usage by 400 million, according to Friday's numbers. Put those together with a relatively "conservative" corn yield estimate of 123.4, and it means there will likely be a bullish initial reaction, then possibly a trend lower followed by a move back higher later on.

"I think the trade is saying there's rationing in place as we go. I think the 123.4 yield was very conservative and in line, so that's why the market is trading the way it is," Roose said Friday morning. "We'll probably see some profit-taking as we go. The overall feeling is the numbers are smaller, but not as small as expected. WE really won't know what we'll have until we get the combines rolling."

Despite the 123.4 number for corn yields, many farmers still see that as too high. Even in what some farmers say were their "garden spots" as late as a month ago, yields have tanked to the point where some feel a national average of 100 bushels/acre could be the high end.

"Had the insurance adjuster out the other day. I live in southeast Nebraska, which was the garden spot until July 4th. I wanted him to look at the corn before I chopped it. This was my worst field, he said between 25-30 bu/ac," says Agriculture.com Marketing Talk senior contributor highyields. "But by the time the ears and kernels dry down, I'm not for sure we'll get half that in the combine. I'm looking at an average around 50-60 on the corn on my farm. I hope. I was in another field and I can walk 10-20 steps where all I have is barren stalks.

"I don't think anyone really realizes how bad it is in the field."

But, even though a lot of farmers agree with highyields and don't see many yields even hitting the triple-digit mark for corn, does that mean USDA will follow suit and continue dropping these yield estimates?

"An additional 23-bushel drop might be a little much," says Marketing Talk frequent contributor ne 50.

But, adds highyields: "It might be hard to get below 120 since the USDA well just keep lower harvested acres. Everyone is telling me that there is lot of corn being chopped."

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