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3 Big Things Today, September 13

Beans, Corn Lower After Bearish Report; USDA Takes Estimates to New Level.

1. Soybean, Corn Futures Fall on Bearish USDA Report

Corn and soybeans fell overnight after a bearish report from the U.S. Department of Agriculture on Monday.

The USDA lowered its yield estimate for corn by less than expected while raising soybeans by more than expected. Corn yield is forecast at 174.4 bushels an acre, down from 175.1 bushels, and soybean yield is pegged at 50.6 bushels an acre, up from last month’s outlook for 48.9 bushels.

If realized, those yield numbers would put corn production at 15.1 billion bushels and soybean output at 4.2 billion bushels, both records.

Corn futures for December delivery fell 2¾¢ to $3.36¾ a bushel overnight on the Chicago Board of Trade.

Soybeans for November delivery dropped 3¾¢ to $9.60½ a bushel, soy meal futures for December delivery fell $2.30 to $309.60 a short ton, and soy oil lost 0.11¢ to 32.53¢ a pound.

Wheat futures for December delivery declined 2¾¢ to $4.06½ a bushel in Chicago, while Kansas City futures lost 2¾¢ to $4.21 a bushel.

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2. WASDE Estimates Well Beyond Analyst, Grower Expectations

It’s apparent the Department of Agriculture didn’t get the memo.

The agency on Monday raised soybean yields well beyond expectations and lowered corn only a small amount – certainly much less than analysts had forecast. So if the report is to be believed, we'll have a lot more beans and corn than we had previously thought we would. That's a big if

Analysts had pegged soybean production at 4.09 billion bushels (well below the 4.2 billion estimated by the government) and corn output at 15 billion bushels (vs. the 15.1 billion forecast by the USDA in Monday’s report). While the government’s estimates are indeed lofty, a lot of people thought they were a bit high going into the report, so when WASDE was released, the obvious happened.

The question, of course, is will growers be able to produce that many soybeans and that much corn? It seems that the USDA believes they can, but if you actually ask producers, the likely answer is no. Many people are saying it’s a good crop, but not the bin buster USDA is projecting.

Reports from the Pro Farmer Crop Tour and even from Agriculture.com’s Marketing Talk board have raised the prospect of crop losses from fungal diseases in much of the Midwest where it’s been raining nonstop for weeks and from dry weather in parts of Ohio where no precipitation has fallen in weeks.

Only time will tell who’s right – the USDA or the analysts and farmers. The big question on everybody’s mind is, of course, how much damage will crops suffer from disease and heat?

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3. Storms Persist in Parts of Midwest, Kansas

Rain is expected – again – in parts of Iowa and Illinois this afternoon, according to the National Weather Service.

In northeastern Iowa and northern Illinois, storms are expected through much of the area, though they aren’t forecast to be severe. The same goes for much of Indiana and southern Illinois, where storms are possible as a cold front moves across the area, the NWS said.

Parts of Kansas are still under flood watches and warnings due to the excessive precipitation the state has seen in recent weeks.

Scattered storms are possible for much of eastern Kansas today, which also could produce small hail and 50-mph winds. The potential for a storm increases tonight, and flooding is expected to continue through midweek, the NWS said in a report on Tuesday.

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