USDA Boosts Forecast for US Corn Production Despite Cutting Its Yield Estimate

The USDA further cut its forecasts for US corn and soybean yields, reflecting a recent resumption of hot and dry conditions, especially in parts of the northern and western Corn Belt. 

In its September WASDE report, the USDA forecast average corn yields of 173.8 bushels per acre, down 0.7% from last month’s projection. However, the yield decline was more than offset by an increase in estimated planted acreage, and the USDA forecast corn production at 384.4 million tonnes (15.134 billion bushels), up 0.2% from last month and the highest level since 2016.

Soybean yields are seen at 50.1 bu/acre, down 1.6% from last month. The USDA projected soybean production at 112.8 million tonnes (4.146 billion bushels), down 1.4% from last month and 3% below last year’s output. 

Higher corn production will push US corn ending stocks for 2023/24 to the highest level in five years. But soybean ending stocks are seen dropping to lows last seen in 2015/16.

The highly anticipated September WASDE is the first from the USDA that incorporates data from the agency’s objective yield samples, in addition to farmer surveys.

With corn and soybean crops now nearing maturity, late-season conditions from mid-August to mid-September have been less than ideal. Extremely hot temperatures coupled with a lack of rain in many parts of the Corn Belt — as seen in this Gro display of precipitation differences from normal — negatively impacted plant development. 

Estimated corn yield changes were scattered throughout the different regions. In the eastern Corn Belt, yields in Illinois and Indiana both declined, but improved in Ohio. North Dakota showed the biggest jump in corn yield, while Nebraska had the largest decline. 

Gro’s machine-learning US corn and soybean Yield Forecast Models are currently predicting a national average yield well above the latest USDA estimates. NDVI, a satellite-derived measure of plant health, showed high values for the peak periods of the growing season. NDVI is the most important driver of Gro’s yield forecast models at this time of year.

However, Gro’s forecasts, which update daily, align with USDA projections in certain regions, including both corn and soybean yields in central-eastern Corn Belt states such as Iowa, Ohio, and Minnesota. 

In the past six years, Gro’s US Corn Yield Forecast Model has been within 1.7% of the USDA final January report by September. Gro’s US Soybean Yield Forecast Model has been within 0.8% of the USDA’s final number by September.

Globally, the USDA further cut its production outlook for Canada’s drought-hit wheat crop — down 6.1% from the agency’s estimate last month. Australia’s wheat crop was lowered another 10.2% due to overly dry conditions caused by El Niño, while Argentina was cut by 5%. 

In India, the monsoon has delivered erratic rainfall across many of the country’s major crop-producing regions. The USDA cut its estimate for India’s rice production by 1.5%, which helped reduce projected 2023/24 world rice ending stocks to 167.6 million tonnes, the lowest since 2017/18. 

US cotton production also was lowered by 6% from the USDA’s previous forecast, for a 9% drop from last year — the smallest US cotton harvest since 2015 — on continued drought in Texas and damage to Georgia’s crop from Hurricane Idalia.