November 2016 Crop Market Update

In advance of the November 9, 2016 World Agricultural Supply and Demand Estimates the consensus in the trade was that USDA would reduce projected corn yields by 0.2 bushels to 173.2 bushels per acre and reduce total corn production by 16 million bushels to 15.041 billion bushels (still a record high). For soybeans, the average trade estimate was for an increase in soybean yields by 0.6 bushels to 52 bushels per acre with soybean production up 45 million bushels to 4.314 billion bushels.

There is a saying in the trade that “big crops get bigger,” and the most recent production estimates proved the adage true. USDA raised production estimates for both crops to new record highs. The November projection for corn production was for 15.2 billion bushels, up 1 percent from the prior month’s projection, and up 12 percent from the prior year. Importantly, the yield projection – after two consecutive downward revisions – was revised up to 175.3 bushels per acre, Figure 1. The current yield projection is 2.1 bushels per acre above the average trade estimate and 11 bushels per acre above the unconditional trend yield. If realized, the 2016/17 corn yield would be 4.3 bushels per acre above the 2014/15 record of 171 bushels per acre.