The ripening corn and soybean fields stretch for miles in every direction from Dennis Wentworth’s farm in Downs, Illinois. As he marvelled at his best-yielding crops ever, he wondered aloud where the heck he’ll put it all.
“Logistics are going to be a huge problem for everyone,” the 62-year-old grower said, adding that he has invested in boosting output rather than grain bins. When harvesting starts in a few weeks, Wentworth expects his 150-year-old family farm to produce 10 per cent more than last year’s record. “There are going to be some big piles of grain on the ground this fall.”
From Ohio to Nebraska, thousands of field inspections this week during the Pro Farmer Midwest Crop Tour show corn output in the US, the world’s top producer, could be 1 per cent more than a government estimate and soybeans 1.2 per cent higher, according to a Bloomberg survey of crop scouts. Months of timely rains and mild weather created ideal growing conditions, leaving ears with more kernels than normal on 10-foot (3-meter) corn stalks and more seed pods on dark, green soy plants.
Prospects of bumper harvests sent Chicago futures tumbling into bear markets last month, two years after a drought eroded output and sparked the highest prices ever. Cheaper grain is bolstering profit for buyers including Tyson Foods Inc. and Archer-Daniels-Midland Co., encouraging some cattle producers in the Great Plains to expand herds, and eroding income for farmers who say increased output will make up for some of the slump.
Bigger Yields
Corn on the Chicago Board of Trade has tumbled 21 per cent since the end of May to $3.695 a bushel today, and soybeans are down 30 per cent to $10.435 a bushel. The Bloomberg Commodity Index slid 6.1 per cent over the same period, while the MSCI All-Country World Index of equities rose 1.8 per cent. The Bloomberg Treasury Index gained about 0.6 per cent.
Samples in Illinois, Ohio, Indiana and Iowa -- representing 45 per cent of forecast US corn output and 41 per cent of soybeans -- showed bigger yields than last year, according to inspections on the 22nd annual Pro Farmer crop tour, which ended yesterday. Corn production will be 14.178 billion bushels, compared with 14.032 billion estimated by US Department of Agriculture, according to a survey of 13 tour participants. Soybean output was forecast at 3.861 billion bushels, compared with a USDA estimate of 3.816 billion.
The volunteer scouts on the four-day crop tour drove more than 15,000 miles across seven Midwest states, the biggest growing region, taking random samples by counting the number of kernels on corn ears and pods on soybean plants. Editors of the Pro Farmer newsletter will issue final estimates of US output today, partly based on this week’s measurements.
Ideal Weather
In Illinois, where the USDA predicted that yields will be 188 bushels an acre on average, the tour estimated 197 bushels an acre, up 16 per cent from the same areas surveyed last year. In Iowa, preliminary samples showed 1,107 soybean pods per 3 square feet, up 18 per cent from last year.
The outlook has improved after months of ideal weather. Through 16 Aug, the majority of the Midwest was slightly dry to abnormally moist, according to a weekly Crop Moisture Index from the National Oceanic and Atmospheric Administration. Temperatures that have been cooler than normal will remain average or below average through the end of August, the agency forecasts.
The government already predicted record crops on 12 Aug and a drop in exports that will boost reserves, with corn output rising 0.8 per cent and soybean production gaining 16 percent. The USDA will update its forecasts on 11 September.
Bloomberg News edited by ESM
