Were there surprises associated with the USDA September corn crop production forecast? According to Chief Economist Seth Meyer:
“I think the big surprise was things which may be built on acreage changes from August.”
This month’s crop production reports were the first of this year based on objective yield surveys by National Agricultural Statistics Service field enumerators.
“So, we ended up actually adding 1.47 million additional acres of corn. That gets us to 98.7 million acres of corn. We haven’t been at this level of corn acreage planting since the 1930s.”
It was increased acreage and a record crop yield forecast last month that indicated far and away record corn production beyond what many experts and analysts expected. Yet Meyer notes analysts were also thinking:
“Given some of the challenges of the crop as it’s finishing. The last yield estimate we got was 188.8 bushels an acre. But the crop isn’t done at that point of the year, so there was some thought, well, maybe there’s some challenges in how the crop is finishing. I think that the yield reduction to 186.7 bushels an acre was perhaps anticipated, but with that acreage change, you actually had an increase in production despite the yield decline.”
Which was, for the most part, unexpected. The chief economist says just as surprising—despite the increase of the already projected record corn production forecast—was how the market reacted shortly after the report’s release.
“Corn futures are up eight cents,” reflecting what Meyer says is industry comfortability with use projections for corn within the U.S. supply and demand balance sheet.
“They’re pushing a lot of that extra corn into ethanol production. We had a record corn export program last year, and we actually reduced carryout stocks this month for the coming crop year—or the current crop year—because we raised exports.”