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Corn+Soybean Digest

Thiesse's Thoughts

Oct. 12 Crop Report

The Oct. 12 USDA Crop Report projects a near-record soybean production for 2006 in the U.S., and one of the highest corn production levels ever. The total 2006 soybean production is projected by USDA to be almost 3.2 billion bushels, which is slightly higher than total production in 2005. The national average soybean yield is projected to be 42.8 bu./acre, which is almost the same as the final U.S. soybean yield in 2005, and is an increase of 1 bu./acre compared to the September USDA Crop Report.

The U.S. corn production for 2006 is projected at 10.9 billion bushels, with a national average yield of 153.5 bu./acre. The 2006 corn production estimate is down from a total U.S. corn production level of 11.1 billion bushels in 2005, and a record 11.6 billion bushels in 2004. Minnesota is projected to harvest just over 1.1 billion bushels of corn, with an average yield of 166 bu./acre. The 2006 average Minnesota soybean yield is estimated at 42 bu./acre. Average yields for Minnesota in 2005 were 174 bu./acre for corn and 45 bu./acre for soybeans. The projected average 2006 yields for Iowa are 168 bu./acre for corn and 50 bu./acre for soybeans.

Volatile Grain Markets
The corn, soybean and wheat grain markets have been on a wild ride in the past couple of weeks, with the futures markets at the Chicago Board of Trade (CBOT) going “limit up” or “limit down” from day to day, and sometimes even in the same day. This type of volatility is more typical of a drought weather-scare in June or July than during harvest season, when corn and soybean markets are usually fairly stable. December CBOT corn futures were above $3.10/bu., and November CBOT soybean futures were close to $5.90/bu. on Oct. 13. This compares to about $2.30-2.35/bu. for December corn futures, and $5.35-5.40/bu. November soybean futures in mid-September.

The strong corn markets are the result of lower than expected U.S. corn yields, increased domestic usage for ethanol production, increased exports and very low projected corn carry-over levels. The total U.S. corn usage for 2006-07 is projected at nearly 11.9 billion bushels, which is 1.3 billion bushels more than two years ago, and is about 1 billion bushels more than the projected U.S. corn production for 2006. Corn used for ethanol production has increased from about 1.3 billion bushels in 2004-05 to an estimated 2.15 billion bushels for 2006-07. The U.S. corn ending stocks, or carry-over, for 2006-07 is projected at just under 1 billion bushels, which represents the lowest U.S. corn carry-over in over a decade. The U.S. corn ending stocks were just over 2.1 billion bushels in 2004-05, and just under 2 billion bushels for 2005-06.

Total U.S. soybean usage for 2006-07 is estimated to increase slightly compared to last year. However, due to increased U.S. soybean production projections for 2006, the U.S. soybean carry-over for 2006-07 is estimated at 555 million bushels, which is up considerably from the soybean ending stocks of 449 million bushels for 2005-06, and 256 million bushels in 2004-05.

Very Good Yields In 2006

Many growers in south central and southwest Minnesota have been reporting good-to-excellent corn and soybean yields in 2006; however, corn yields are generally 10-15% below the record-setting 2005 corn yields in the region. 2006 soybean yields have been fairly comparable to 2005 soybean yields in many areas, with some yields slightly higher this year, and others just below 2005 yield levels. Overall, 2006 corn and soybean yields have been much more variable than last year, due to hot, dry weather conditions this past summer. The yields have been somewhat lower and even more variable in portions of the region that were extremely dry in July and August, and in localities that were impacted by severe wind and hail storms in August and September.

Corn and soybean yields have varied widely from farm-to-farm, field-to-field, and even the same field, depending on soil types, amount of rainfall, and the locations of severe storms. Most whole-field soybean yields have ranged from 45-60 bu./acre, which represents above average soybean yields for most growers. Most whole-field corn yields have been reported from 145-185 bu./acre, which is again above average in most instances, but below the 175-200 bu./acre average corn yields for most growers in 2005.

The kernel moisture content of the corn has continued to decline during the early part of October. Most corn hybrids were being harvested at 14-20% moisture by Oct. 12, which means that most of the corn required very little or no drying before being placed in on-farm storage. Most producers left the corn in the field as long as possible to maximize field dry-down of the corn, in order to reduce the increased corn drying costs, which has resulted from high natural gas and propane prices. Corn needs to be dried to about 15% moisture for safe on-farm storage until the following spring or summer, when it normally sold to market.

Editors note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at [email protected].
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