The US may be underestimating its corn and soybean
production prospects on yield, but is overestimating plantings, Macquarie said,
adding to the evidence of crop tours released to the market.
The bank backed the consensus that the US Department of
Agriculture is underestimating US corn and soybean yield potential, even after
upgrading its forecasts last week to 167.5 bushels per acre for the grain and
45.4 bushels per acre for the oilseed.
"Our tour showed, as expected, the record-breaking potential
of this season's crop," Macquarie analyst Chris Gadd said, flagging in particular
prospects for eastern Corn Belt such as Illinois, where crops appeared "unbelievably
Factoring in some potential for disappointment in Minnesota
and northern Iowa, where dryness has curtailed potential, Macquarie forecast
the corn yield at 170.3 bushels per acre, and the soybean result at 45.8 bushels
per acre, both record highs.
'Very high assessment'
The result comes amidst a series of Midwest crop tours, with
Lanworth on Monday estimating the US corn yield at a record 174.8 bushels per
acre, and soybean yield at 46.4 bushels per acre, after a tour which took in
Illinois, Indiana and Iowa, and parts of Minnesota, Nebraska and Ohio.
Allendale is undertaking a survey due for release in two
weeks' time, while the ongoing ProFarmer tour, one of the most widely followed,
is showing corn yield potential and soybean pod counts broadly ahead of last
year, with many states looking on course for record highs.
The ProFarmer tour has "given a very high assessment of the
yields that can be expected," Commerzbank said, adding that "many observers
therefore expect the US Department of Agriculture to upwardly revise its yield
estimates for the US corn and soybean crops again".
However, Macquarie cautioned over levels of crop abandonment
in some states, such as Iowa and Minnesota, but also Nebraska where even though
crop prospects are "excellent" the east of the state has been hit by "greater
volumes of hail storms", besides high winds.
"There are likely to be higher-than-normal volumes of
abandonment in the east," Mr Gadd said.
Furthermore, analysis of data on Friday from the Farm Service
Agency, which collects data from insurance policies against lost crops, to
those which could not be planted, indicates that the USDA may be too generous in
its corn and soybean sowings estimates.
The data "in our view suggest the USDA's area has
overestimated plantings in some states", Mr Gadd said.
Macquarie estimated corn area at 90.5m acres, 1.125m acres
below the USDA figure, and soybean plantings at 84.4m acres, some 400,000 acres
below the official guess.
The impact on the soybean balance sheet was to offset the impact
of highest yield expectations, and in corn to curtail the US harvest at
14.017bn bushels, 15m bushels below the USDA forecast.
Brokers have in fact revealed different interpretations of
the FSA data which, in not including only farms eligible for insurance, do not
cover the complete US sector.
Doane said too that the FSA report "suggests that corn planted
acreage at 91.6m acres may be too high".
US Commodities said that the FSA suggest that the USDA corn
sowings estimate is 1.5m acres too high, with the soybean number optimistic by
However, another broker said that the data were "incomplete"
and "should be disregarded", while, at Futures International, said that "we
don't see the number this year as a major market factor, unlike recent years
such as the drought in 2012".