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Analyst expects conservative USDA corn yield estimate

Traders expect the USDA to drop the average corn yield in Thursday’s crop production report to around 166 bushels per acre. Some estimates have been as low as 163.

Those compare to USDA’s previous forecast of 171 bushels per acre.

But commodities analyst Arlan Suderman with INTL FCStone says the complex formula USDA uses to determine yield in its August report will likely produce a more conservative estimate on Thursday.

“The formula itself would suggest maybe a three to three-and-a-half bushel reduction, which would put us somewhere in the 167 to 167½ range—unless there’s some significant population issues out there,” he says. “So it does leave us a little bit vulnerable, near term, to a bearish surprise.”

Suderman predicts USDA will lower the average corn yield again in its September report. He says a recent survey of FCStone’s clients produced a much lower average corn yield.

“Our clients are the commercial entities who generally have agronomists who are walking the field and are talking to farmers who are walking the fields,” he says, “and our estimates have been 162.8 bushels per acre for the corn crop and 47.7 bushels for soybeans.”

The crop production report comes out at 11:00 Central time Thursday.

AUDIO: Arlan Suderman