Wednesday, September 3, 2014

US corn harvest prospects recieve rare downgrade


US corn harvest prospects recieve rare downgrade

US corn production prospects received a rare downgrade – albeit to a still-high figure – in a spate of revised harvest estimates implying scope for large upgrades when US officials next week revisit their own forecasts.

Analysis group Lanworth trimmed by 0.8 bushels per acre to 173.7 bushels per acre its forecast for the US corn yield this year, and by 200m bushels to 14.6bn bushels its estimate for production.

The downgrade contrasted with the upward trend of most crop forecasts, including from INTL FCStone, which overnight raised its estimate for the yield by 1.7 bushels per acre to 174.1 bushels per acre, and for production by 140m bushels to 14.595bn bushels.

Strong US Department of Agriculture data on the condition of the US corn crop, rated by far the best since at least 1994 for the time of year, prompted Futures International to lift its forecasts too.

East vs west Corn Belt

Lanworth, which employs satellite data significantly in its analysis, said that its downgrade reflected evidence of "moderately suppressed crop vegetation density over previously dry areas of Iowa, Minnesota, and Nebraska".

Nonetheless, its estimate remains well above a USDA forecast of 167.4 bushels per acre, which is up for revision next week with the release of the monthly Wasde crop report.

In eastern Corn Belt states a "combination of favourably cool temperatures, near-average precipitation and timely crop development indicate corn could yield 8-16% above trend and well above USDA's August estimates", Lanworth said.

Separately, Allendale released the results of a farmer survey showing a yield forecast of 171.9 bushels per acre, and production estimate of 14.409bn bushels.

US corn yield, (production) forecasts

FCStone: 174.1 bushels per acre, (14.595bn bushels)

Lanworth: 173.7 bushels per acre, (14.6bn bushels)

Allendale: 171.9 bushels per acre, (14.409bn bushels)

Futures International: 170.8 bushels per acre, (14.280bn bushels)

Acreage threat

US soybean yield, (production) forecasts

FCStone: 47.6 bushels per acre, (4.00bn bushels)

Lanworth: 46.7 bushels per acre, (3.85bn bushels)

Allendale: 46.4 bushels per acre, (3.884bn bushels)

Futures International: 46.2 bushels per acre, (3.880bn bushels)

Lanworth added that weather forecasts "do not yet indicate risk for early freeze across the northern production region" which would pose a threat to harvest prospects in potentially bringing the growing season to an end.

However, it did highlight the potential for a downgrade to its production forecast from a revision to acreage estimates, with data from the Farm Service Agency gleaned from insurance returns indicating "a loss of 1m acres or more from our current estimate of US corn plantings".

Lanworth, which revealed an estimate for harvested US corn area of 84.328m acres, a little above the USDA forecast, said that it was continuing to review its forecast.

China downgrade

The group restated an estimate for the US soybean yield of 46.7 bushels per acre, with production pegged at 3.85bn bushels, down 10m bushels from the previous forecast.

"Minor yield reductions in Iowa, Kansas, Minnesota, and Nebraska are largely offset by higher yield in Indiana and Delta states," Lanworth said.

The comments came in a report in which the group also reduced its estimate for the Argentine wheat crop by 700,000 tonnes to 12.1, tonnes, citing "excessive precipitation" in parts of the major producing province of Buenos Aires.

The forecast for China's corn harvest was downgraded by 2m tonnes to 218m tonnes, after "below average precipitation fell across the Northeast provinces of Jilin and Liaoning, and much of the North China Plain" last month.

"In spite of recent precipitation, current soil moisture remains well below average across Hebei, Shandong and Henan and slightly below average in Jilin and Liaoning," the group said.

"Drought impacts are likely to be as severe as 2002 for Hebei (-5%) and Shandong (-13%), and 2009 for Liaoning (-22%)."

The USDA estimates Chinese corn output this year at 222m tonnes.

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