Focus on Ag: USDA increases corn, soybean ending stocks

Kent Thiesse
Farm Management Analyst and Vice President, MinnStar Bank
Kent Thiesse

The U.S. Department of Agriculture released its World Supply and Demand Estimates report on Oct. 12, which will likely impact corn and soybean markets in the coming months.

The WASDE report projects increases in overall U.S. corn and soybean ending stocks by the end of the 2021-2022 marketing year, compared to 2020-2021 carryover levels. The overall production of corn and soybeans in 2021 is expected to be at higher levels than existed a year ago, based on increases in harvested acres and estimated average yield for both crops this year.  

The report also showed a slight decrease in total demand levels for both corn and soybeans in the coming year, compared to 2020-2021 levels. Total demand for corn usage in 2021-2022 was decreased by only 39 million bushels from 2020-2021 year-end estimates, mainly due to a projected decrease in corn export levels, which was partly offset by slight increases in the amount of corn expected to be used for feed and ethanol production.

Total expected soybean usage for 2021-2022 is expected to decrease by 106 million bushels from the 2020-2021 final usage estimates, mainly due to a large projected decrease in export levels to China and other countries.

The October USDA report increased the estimated U.S. corn ending stocks for both the 2020-2021 and 2021-2022 marketing years, as compared to the September WASDE report.

The 2020-2021 corn ending stocks are now projected at 1.236 billion bushels compared to 1.187 billion bushels in September, while the 2021-2022 corn ending stocks are now estimated at 1.5 billion bushels, which compares to 1.408 billion bushels in September.

Previous year-end corn carryout levels include 1.99 billion bushels in 2019-2020, 2.22 billion bushels in 2018-2019, and 2.14 billion bushels in 2017-2018.

The 2021-2022 U.S. corn carryout-to-use ratio is now estimated at 10.1%, which is still fairly tight and compares to ratios of 8.3% for 2020-2021, 14.4% in 2019-2020, and 15.5% for 2018-2019.

The continued tight stocks-to-use ratio should help support the tighter basis levels at many locations in the Midwest and keep the potential for short-term rallies in the cash corn market in the coming months.

The 2021-2022 U.S. soybean ending stocks in the WASDE report were estimated at 320 million bushels, which is an increase of 135 million bushels from the September USDA report. The projected 2021-2022 carryover level is an increase of 25% from the estimated final 2020-2021 ending stocks of 256 million bushels; however, the 2021-2022 soybean stocks would still be considerably below previous carryover levels of 523 million bushels in 2019-2020, 909 million bushels in 2018-2019, and 438 million bushels for 2017-2018.

The soybean carryout-to-use ratio for 2021-2022 is estimated at 7.3%, which is an increase from 5.7% for 2020-2021; however, the 2021-2022 ratio is still well below the 13.2% ratio for 2019-2020 and nearly 23% for 2018-2019. The expected increase in soybean ending stocks for both 2020-2021 and 2021-2022 was largely the result of increased soybean stocks in the Sept. 30 USDA grain stocks reports, which has put pressure on current soybean prices.

USDA is estimating the U.S farm-level cash corn price for 2021-2022 at an average of $5.45 per bushel, which is unchanged from the September estimate. The 2021-2022 USDA price estimates are the expected average farm-level prices for the 2021 crop from Sept. 1, 2021 to Aug. 31, 2022; however, they do not represent estimated prices for either the 2021 or 2022 calendar year.

The projected 2021-2022 average corn price compares to final market-year average corn prices of $4.45 per bushel for 2020-2021, $3.56 per bushel for 2019-2020, $3.61 per bushel for 2018-2019, and $3.36 per bushel for both 2017-2018 and 2016-2017.

USDA is projecting the U.S. average farm-level soybean price for the 2021-2022 marketing year at $12.35 per bushel, which is a decrease of $.55 per bushel from the September estimate.  The 2021-2022 soybean price estimate would still be the highest in several years and compares to final market-year average prices of $10.80 per bushel for 2020-2021, $8.57 per bushel for 2019-2020, $8.48 per bushel in 2018-2019 and $9.35 per bushel in 2017-2018.  

USDA increases 2021 corn and soybean ending stocks

The monthly USDA crop production report was also released on Oct.12. USDA increased the expected 2021 national average corn yield by two-tenths of a bushel and increased the projected 2021 U.S. average soybean yield by nearly one bushel per acre as compared to the September report.

The latest estimated 2021 national corn yield is 5.1 bushels per acre higher than the final 2020 average yield, while the projected U.S. average soybean yield for 2021 is one-half bushel per acre above the final 2020 national soybean yield.

The latest USDA report estimated the total U.S. corn production for 2021 at just over 15 billion bushels, which is about 3% above the production level of 14.1 billion bushels in 2020. This compares to production levels of 13.62 billion bushels in 2019, 14.42 billion bushels in 2018, 14.6 billion bushels in 2017 and would be just below the 2016 record production of 15.15 billion bushels.

USDA is estimating the 2021 national average corn yield at 176.5 bushels per acre, which is just below the record U.S. average corn yield of 176.6 bushels per acre in 2017.

The projected 2021 U.S. corn yield also compares to 171.4 bushels per acre in 2020, 168 bushels per acre in 2019 and 176.4 bushels per acre in 2018. The estimated 2021 U.S. harvested corn acreage is 85.1 million acres, which is well above the 82.3 million acres that were harvested last year.

The USDA report estimated 2021 U.S. soybean production at 4.45 billion bushels, which is above the production levels of 4.22 billion bushels in 2020 and 3.55 billion bushels in 2019 and similar to the production levels of 4.4 billion bushels in both 2018 and 2017.

USDA is estimating 2021 U.S. soybean yield at 51.5 bushels per acre, which compares to 51 bushels per acre in 2020, 47.4 bushels per acre in 2019, 50.6 bushels per acre in 2018 and the record U.S. soybean yield of 52.0 bushels per acre in 2016.

The harvested soybean acreage for 2021 is estimated at 86.4 million acres, which is up considerably from 82.6 million acres in 2020 and 74.9 million acres in 2019; however, it is still below the 87.6 million harvested acres in 2018. 

The October USDA report increased the expected 2021 corn yield in several states compared to the September report, including in Iowa, Minnesota and Nebraska. Minnesota is projected to have a 2021 corn yield of 178 bushels, which compares to 191 bushels per acre in 2020, 173 bushels per acre in 2019 and the current state record yield of 194 bushels per acre in 2017.

USDA is estimating the 2021 Iowa corn yield at 201 bushels per acre, which compares to 177 bushels per acre in 2020, 198 bushels per acre in 2019 and the state record yield of 203 bushels per acre in 2016.

Illinois and Indiana are expected to have record average corn yields in 2021 at 210 and 194 bushels per acre respectively, which compares to 2020 average corn yields of 191 bushels per acre in Illinois and 187 bushels per acre in Indiana.

Other projected 2021 average corn yields are as follows:

  • Nebraska:190 bushels per acre (compared to 180 bushels per acre in 2020)
  • South Dakota: 133 bushels per acre (compared to 162 bushels per acre in 2020)
  • North Dakota: 107 bushels per acre (compared to 139 bushels per acre in 2020)
  • Wisconsin: 172 bushels per acre (compared to 173 bushels per acre in 2020)

USDA is estimating the 2021 Minnesota soybean yield at 49 bushels per acre, which compares to 50 bushels per acre in 2020, 44 bushels per acre in 2019 and record yield of 52.5 bushels per acre in 2016.

Iowa is projected to have a record soybean yield of 61 bushels per acre in 2021, compared to 56 bushels per acre in 2020, 55 bushels per acre in 2019 and the previous record yield of 60 bushels per acre in 2016.

Several other projected 2021 state soybean yields would also be new record yields, including:

  • Illinois: 64 bushels per acre (compared to 60 bushels per acre in 2020)
  • Indiana: 60 bushels per acre (compared to 59 bushels per acre in 2020)
  • Nebraska: 61 bushels per acre (compared to 58 bushels per acre in 2020)

The South Dakota 2021 soybean yield is estimated at 40 bushels per acre, compared to 46 bushels per acre in 2020, North Dakota at 26 bushels per acre, compared to 34 bushels per acre in 2020 and Wisconsin at 54 bushels per acre, compared to 52 bushels per acre in 2020.  

For additional information contact Kent Thiesse, farm management analyst and senior vice president, MinnStar Bank, Lake Crystal, Minn., at 507-381-7960 or kent.thiesse@minnstarbank.com, or visit www.minnstarbank.com.