Informa Lowers Production Potential

By Katie Micik
DTN Markets Editor

OMAHA (DTN) — Private analytical firm Informa Economics lowered its production estimates for corn and soybeans in a report on Thursday.

Farmers will grow 13.41 billion bushels of corn in 2015 with an average national yield of 165.4 bushels per acre. Production is 152 million bushels lower than Informa’s June estimate, reflecting USDA’s recent acreage estimates and a 1 bpa decline in average yield.

"That is down from USDA’s June estimate of 13.63 billion bushels and yield of 166.8 bushels an acre," said DTN Analyst Todd Hultman. "This may be a start in the right direction, but with problems of flooded and soggy fields in the key growing areas of Missouri to Ohio, it would not be surprising to see these estimates fall further than Informa expects as the year progresses."

USDA will release its next World Agricultural Supply and Demand estimates on Friday, July 10, at 11 a.m. CDT. The report is expected to incorporate the latest grain stocks and acreage data as well as the rainy change in weather pattern.

"Informa also estimated this year’s U.S. soybean production at 3.81 billion bushels with a yield of 45.1 bushels an acre," Hultman said. "Similar to corn, this seems to be a cautious reduction that does not fully reflect problems in the fields."

Informa’s soybean estimate is 64 mb lower than its previous forecast, but the yield "is essentially unchanged from its previous forecasts as increases in the Western Corn Belt mostly offset reductions in the Eastern Corn Belt and Missouri."

Sorghum production came in at 555 mb, up 70 mb from Informa’s previous report and, if realized, would be 122 mb larger than last year’s crop. The bulk of the increase is due to the boost in acres in last week’s report and a 3.1 bpa increase in yield to 71.4 bpa.

Informa made minor changes to winter wheat production compared to USDA’s production estimates from early June. Hard red winter wheat production is now seen up 2 mb to 889 mb, soft red winter wheat down 20 mb to 394 mb, and winter white is seen down 10 mb at 194 mb.

The initial spring wheat projection was 606 mb with a national average yield of 45.9 bpa, Informa said.

Informa stressed that "the most significant yield-determining portion of the growing season for row crops lies ahead." The report included a study of how NASS’ crop production estimates, which begin in August, compare to USDA’s final numbers.

The current USDA estimates Informa compares to come from the World Ag Outlook Board and are based on models. NASS’ August estimates will be based on surveys.

Informa’s study shows that USDA’s final results can vary widely from initial August estimates.

"It strongly supports the reality that fall crop yields are dominantly determined by July, August, and September weather (October for some cotton production), which obviously has not been realized prior to USDA’s August Crop Production report," the report stated. "With such a large part of the growing season ahead, USDA’s August production forecasts are, by definition, inherently tenuous, as are any production forecasts made prior to August with July weather added to the list of unknown events."

Katie Micik can be reached at katie.micik@dtn.com

Follow her on Twitter @KatieMDTN

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