2020 US Corn & Soybean Output

Market Analysis

As the commodity markets end 2020, the current focus is on world’s strong demand levels and the impact of South America’s weather on the size of this year’s global supplies going forward. However, the final US row crop levels for 2020/21 season will be watched closely when they are released on January 12. The changes are not likely to be monumental, but the potential for further declines in both corn (CORN) and soybeans (SOYB) final yield and crop sizes would add to the current world supply concerns.

Despite a cool, wet spring in the ECB, Delta and SE that delayed corn planting and impacted plant populations, producers and the USDA were optimistic about this year’s prospects by mid-summer. However, dryness in the western Midwest that began in July and continued to build eastward into September took the top end off Midwest yields. Iowa’s highly unusual Derecho windstorm flatten a wide swath of fields added to corn’s reduced output while tropical storms provided moisture to the Delta and SE fields this past summer. Overall, the US corn yield slid 6 bu to 175.8 from August to November. With the US corn yields declining 5 of the past 7 years from November to January, a 1-bushel decline is likely next month resulting in an 82 million bu. smaller 2020 US crop size.

In soybeans, 2020’s growing season was also impacted by drought that spread across the Midwest particularly during the August to October time period. Last fall’s warm, dry conditions also dipped this year’s grain moisture to 10% or less in many areas of the country during harvest reducing yields, too. With the US final soybean yield dropping 4 out of the last 5 years November, January’s soybean yield is likely to slip another 0.4 bu. to 50.3 bu. This change will decrease the US supply by 35 million to 4.135 billion bu.

After last fall’s Small Grains Report, no change in the total US wheat crop or its various varieties is likely on the upcoming January 12 production report. The USDA’s US winter wheat seedings update will probably be the main market factor for this food grain that day

What’s Ahead:

The USDA’s final major US crop sizes are always important to the markets. However, the demand for US crops, both domestically & internationally, along with South America’s weather impact on its crops will be the major early 2012 price factors. With La Nina impacting the Pacific Ocean, Argentine & Brazilian crop sizes will determine if further price strength will be needed for soybeans, corn, & wheat (WEAT). Hold Sales.

Disclaimer: The information contained in this report reflects the opinion of the author and should not be interpreted in any way to represent the thoughts of any futures brokerage firm or its ...

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