USDA's New Methodology May Bring Yield Surprise in September Report

The upcoming September crop production report from USDA will use objective field data for the first time this marketing year to determine yields. This marks a significant change in methodology, and market experts are eager to see how it affects yield estimates.

For corn, the average pre-report estimate is 178.4 bu. per acre, down 2.3 bu. from August. This reflects the challenging weather conditions in August and early September that affected the crop. Mike Castle, senior commodities economist with StoneX, notes that the increased rainfall in some areas may offset the heat wave that sped up maturity.

However, drought and heat in Western Corn Belt states have had a devastating impact on corn yields. States like North Dakota, Colorado, and Kansas are showing significant crop losses, with 48%, 52%, and 37% of their corn crops in poor to very poor condition, respectively. Randy Martinson with Martinson Ag believes this could lead to a lower yield estimate in the September report.

The market is already trading below the average trade guess of 178.4 bu. per acre, which could make for an unpleasant surprise if confirmed. The range of estimates from Pro Farmer's 173.2 bu. per acre at the low end to StoneX's 182.3 bu. per acre on the high end, a 9.7 bu. spread, adds to the uncertainty.

For soybeans, the trade is not expecting significant changes in national yield, with an average trade guess of 52.5 bu. per acre, down only 0.2 bu. from August. While weather data suggests a slightly higher soybean yield moving forward, USDA may not make any changes to this estimate.