The USDA updates its crop production estimates this week, and analysts will be watching to see whether favorable growing conditions push yield forecasts even higher. University of Minnesota Extension economist Ed Usset says while conditions remain mixed across parts of the Corn Belt, expectations still call for another large U.S. corn and soybean crop. Usset says that despite regional differences, current private estimates remain largely in line with USDA’s projections for corn.
“Now if you look nationwide, it is more of a mixed bag. It’s always more of a mixed bag nationwide. More, I think, speaking to something closer to a trendline yield. USDA’s got what, 183 for corn. And I hear this morning that StoneX came out at 184, and I’m not going to disagree with that sort of that zone.”
The soybean story is similar. While some areas continue to struggle, Usset says Minnesota is having one of its best growing seasons in years.
“Similar story there. In fact, for Minnesota itself, our soybean conditions are running better than our best years, the average of our best years. And nationwide, again, more of a mixed bag. Minnesota is sort of standing out this year, and it’s not going to be that good nationwide. And yet, we have some really good areas going. Here a couple of, a week and a half ago, I had a chance to drive through southeastern Minnesota. Frankly, it was mind-blowing how good these soybeans look that early in late July. So a mixed bag again, but I’m not going to disagree with USDA’s viewpoint on an average yield.
Even with strong crop conditions, Usset says soybean prices from here will depend less on what’s happened so far and more on what August weather brings.
“I think that’s a good guess. Now, we’re watching weather. August makes the soybean crop, and I’ll take you back two decades, a year I went out to Farm Fest. And I only mention it because it’s in Minnesota. It’s in the first week of August, and I spoke at Farm Fest in 2003. And as I left the event, I distinctly remember that it was sort of drizzly rain, and I was ruining a nice new pair of shoes. What was interesting about that, it was the last time it rained for five weeks. And of course, if you look at the 2003 corn crop and soybean crop, the corn crop was fine. It was sort of a trend-line yield, sort of a normal corn crop in Minnesota and nationwide. The soybean crop was not. It will be driven by weather. If we can assume a normal August, I think the highs are in.”
If weather cooperates and prices continue to ease into harvest, Usset says the focus shifts from production to marketing. He says producers should be prepared for harvest pressure but also keep an eye on opportunities that may develop later.
“I do see possibilities after harvest. I see big carries in the market, possibilities for people. Anyone who got, who had the nerve to get some new crop sales done in the May bulge, in the echo that came in the last month in July, if they got some sales off with a hedge to arrive or a future sale, there’s a great opportunity to roll that hedge forward, particularly in corn from the Dec to the March, the May or the July of 2027 contract and add more to the bottom line. That doesn’t help you much at harvest. If you’ve got to run it across the scale, we’re probably going to be disappointed at harvest. I don’t think we’re going to see the lows we saw in the last two years that got very extremely low.”
University of Minnesota Extension economist Ed Usset says while he doesn’t expect corn prices to fall below $4 a bushel like they did the past two harvests, he believes seasonal harvest pressure could still trim another 20 to 30 cents from the market before post-harvest opportunities begin to emerge.