Gro’s US yield forecast models once again got the jump on the USDA WASDE report’s crop projections. In its January WASDE, the USDA left largely unchanged its US corn and soybean estimates, which are in line with forecasts made by Gro’s machine learning-based models in September.
Meanwhile, the USDA lowered its estimates for the Brazilian and Argentine soybean and corn crops, but Gro expects the department will need to drop its estimates further as dry conditions brought on by La Niña continue to worsen.
The January WASDE is one of the USDA’s most consequential reports, containing final US numbers for the past season and projections for the start of the current season in the Southern Hemisphere. In light of this, Gro last week released our own Global Supply and Demand Forecasts report for January in anticipation of the WASDE. You can download Gro’s complete January Supply and Demand Forecasts report in PDF form here.
In its WASDE report, the USDA kept its corn yield estimate unchanged at 177.0 bushels per acre (bu/acre) and slightly increased its soybean yield to 51.4 bu/acre. These numbers are nearly identical to Gro’s projections of 177.4 bu/acre for corn and 51.1 bu/acre for soybeans, estimates that Gro’s yield models first began forecasting in early September.
Drought troubled the northern Plains and areas of the western Corn Belt (WCB) throughout the 2021 growing season, driving corn yields in North and South Dakota at least 20% below those of 2020. Several states also battled too much rain, particularly in the eastern Corn Belt (ECB). Despite uncertain growing conditions, the top three corn-producing states — Iowa, Illinois, and Nebraska — all harvested record or near-record yields, in line with Gro’s yield forecasts for those states.
The USDA increased its estimate of US corn demand for ethanol to 5.325 billion in 2021/22, an increase of 75 million bushels. Gro, which expects corn use for ethanol of 5.305 billion bushels, has long predicted the USDA’s estimate was too low.
For South America’s current growing season, the USDA lowered its estimates for corn and soybeans in both Brazil and Argentina due to dry conditions impacting yields. For Brazil, the largest soybean producer, the USDA reduced its forecast to 139 million tonnes of soybeans, a 3.5% decline from last month’s WASDE and 1% above last year’s production.
But Gro’s Brazil Soybean Yield Forecast Model, which went live for the season in mid- December, is already pointing to below-trend yields in Brazil as growing conditions continue to worsen, especially in the southern states of Paraná and Rio Grande do Sul. Like all of Gro’s yield models, the Brazil forecasts update on a daily basis, in contrast to the monthly WASDE estimates.
With Brazil soybean production on a downward slide, the US has potential to pick up additional export business. Gro projects an increase in US soybean export demand versus USDA. Gro’s early season forecast gives added weight to the historical ratio of exports to production, while total export commitments become a bigger factor as the season progresses. You can monitor Gro’s US Soybean Export Forecast Model as the estimates update.
The USDA also trimmed its estimate for Argentine corn from last month by 1% to 54 million tonnes. But Gro’s production forecast, driven by Gro’s Argentina Corn Yield Forecast Model, is much lower as drought spreads in major corn producing provinces of Sante Fe, Cordoba, and Buenos Aires.
South American production will be top of mind as we get closer to harvest in coming weeks. After that, attention will shift to US prospective plantings for the 2022 crop year. Join Gro’s research analyst team for our webinar on March 3, What Will Farmers Plant in 2022?, to hear our predictions for US planting intentions for the upcoming season.