FOCUS ON AG

Written by Kent Thiesse

Farm Management Analyst and Senior Vice President, MinnStar Bank
November 15, 2021
USDA REPORTS FAVORABLE TO SOYBEAN MARKETS
The monthly USDA World Supply and Demand Estimates (WASDE) Report was released on November 9,
which will likely impact corn and soybean markets in the coming months. The WASDE Report made minor
adjustments to projected 2021-22 U.S. corn and soybean carryover estimates at the end of the current marketing
year on August 31, 2022, as compared to estimates last month. The biggest surprise to the grain markets was a
downward adjustment in the estimated soybean production levels for 2021 from a month earlier. Corn
production levels were increased slightly in the November WASDE Report.

Most grain marketing analysts viewed the latest USDA reports as neutral for corn and somewhat “bullish” for
soybeans. December corn futures closed at $5.55 per bushel on the Chicago Board of Trade (CBOT) following
the November 9 report, which compares to $5.17 per bushel following the WASDE report on September 10 and
to $3.95 per bushel following the November WASDE report in 2020. CBOT November soybean futures were
sharply higher following the latest WASDE report, closing at $12.12 per bushel on November 9, which is still
well below the $12.86 per bushel price following the September report and compares to $11.38 per bushel
following the WASDE report in November of 2020.

The 2021 national average corn yield is now estimated at the record level of 177 bushels per acre, which was
increased from 176.5 in October. The 2021 harvested corn acreage in the U.S. was maintained 85.1 million
acres, resulting in a total estimated 2021 corn production of 15.06 billion bushels, which is the second largest
total corn production level ever. This compares to total U.S. corn production levels of just over 14.1 billion
bushels in 2020 and to 13.6 billion bushels in 2019. Total corn usage for the 2021-22 year is now estimated at
just over 14.8 billion bushels, which would be very similar total corn demand levels in the 2020-21 marketing
year. Corn export levels and corn used for feed were unchanged from the October estimates; however, the
amount of corn used for ethanol production was increased by 50 million bushels from last month’s projection.

USDA is now estimating 2021-2022 U.S. corn ending stocks at just under 1.5 billion bushels, which compares
to carryout levels of 1.24 billion bushels in 2020-21, 1.99 billion bushels for 2019-20, and 2.11 billion bushels
in 2018-19. Based on current estimates, the U.S. corn carryout to use ratio would be at 10.1 percent for 2021-
22, which compares to 8.3 percent in 2020-21, 14.4 percent in 2019-20, and 14.6 percent for 2018-19. The
continued tighter corn stocks could result in the potential for short-term rallies in the cash corn market and
continued tighter than normal local basis levels at many locations in the coming months.

The 2021-22 U.S. soybean ending stocks in the recent WASDE Report were estimated at 340 million bushels,
which was below the average estimates of many grain marketing analysts. The projected soybean ending stocks
are up 33 percent from 256 million bushels in 2020-21; however, the projected 2021-22 carryout level is still
well below the ending stocks of 523 million bushels in 2019-20 and 913 million bushels in 2018-19. The
soybean stocks-to-use ratio for 2021-22 is estimated at 7.8 percent, which is up from 5.7 percent in 2020-21 but
still trails the levels of 11.5 percent in 2019-20 and 23 percent for 2018-19.

Total U.S. soybean production for 2021 was estimated at 4.42 billion bushels in the November report, which
was reduced by 23 million bushels from the October USDA estimate and was about 60 million bushels lower
than the average grain trade projection. Total soybean demand for 2021-22 is projected at nearly 4.36 billion
bushels, which is down from 4.5 billion bushels in 2020-21. The anticipated reduction in U.S. soybean demand
in the coming year is primarily due to a decrease in the expected soybean export levels in 2021-22. The fact that
soybean ending stocks remain fairly tight may offer some opportunities for short-term rallies for farm-level
soybean prices in the coming months, especially if there are any weather-related production issues in South
America.

Based on the November WASDE report, USDA is currently estimating the U.S average on-farm cash corn price
for the 2021-2022 marketing year at $5.45 per bushel, which was unchanged from the October report. The
USDA price estimates are the expected average farm-level prices for the 2021 crop from September 1, 2021 to
August 31, 2022; however, they do not represent estimated prices for either the 2021 or 2022 calendar year. The
projected USDA average corn price of $5.45 per bushel would be the highest since 2012-13 following the 2012
drought. The 2021-22 estimated corn price compares to recent national average corn prices of $4.53 per bushel
for 2020-21, $3.56 per bushel for 2019-20, $3.61 per bushel for 2018-19, and $3.36 per bushel for 2017-18.

USDA lowered the projected U.S. average farm-level soybean price for the 2021-2022 marketing year to $12.10
per bushel, which was decreased by $.25 per bushel from the October estimate. The projected national average
soybean price would still be the second highest in the past decade. The 2020-21 projected national average
soybean price compares to $10.80 per bushel for 2020-21, $8.57 per bushel for 2019-20, $8.48 per bushel for
2018-19, and $9.35 per bushel for 2017-18.

USDA INCREASES NATIONAL CORN YIELD PROJECTION

Based on the USDA Crop Production Report released on November 9, USDA increased the projected U.S.
average corn yield for 2021 to the new record level of 177 bushels per acre. This compares to other recent U.S.
corn yields of 171.4 bushels per acre in 2020, 167.5 bushels per acre in 2019, 176.4 bushels per acre in 2018,
and the previous record yield of 176.6 bushels per acre in 2017. The projected 2021 U.S. harvested corn acreage
is 85.1 million acres, which is up from 82.3 million acres that were harvested last year.

The November USDA Report increased the projected 2021 corn yields from the October report in Minnesota by
8 bushels and in South Dakota by 4 bushels, with a 1 bushel per acre increase in both Nebraska and North
Dakota. The latest USDA report left corn yields unchanged from a month earlier in Iowa, Ohio and Wisconsin,
while slightly reducing estimated yield levels in Illinois and Indiana. Minnesota is now projected to have a
statewide average corn yield of 186 bushels per acre in 2021, while estimates for Iowa are at 201 bushels per
acre. Other projected 2021 State average corn yields are Illinois at 207 bushels per acre, Indiana at 189 bushels
per acre, Ohio at 188 bushels per acre, Nebraska at 191 bushels per acre, and Wisconsin at 184 bushels per acre.
The drought-stricken States of North and South Dakota are projected at 108 and 137 bushels per acre
respectively.

USDA is estimating the 2021 U.S. soybean yield at 51.2 bushels per acre, which was a decline of 0.3 bushels
from the October estimate. The projected 2021 national average soybean yield compares to 51 bushels per acre
in 2020, 47.4 bushels per acre in 2019, 50.6 bushels per acre in 2018, the record U.S. soybean yield of 52.0
bushels per acre in 2016. The 2021 harvested soybean acreage is projected at 86.4 million acres, which is an
increase of 5 percent from the 2020 U.S. soybean acreage but is over 15 percent above the 74.9 million soybean
acres harvested in 2019.

USDA is estimating the 2021 Minnesota soybean yield at 49 bushels per acre, which is quite solid considering
the very dry conditions that existed in many areas this past Summer. USDA is projecting record statewide
soybean yields for 2021 in Iowa at 60 bushels per acre, Illinois at 64 bushels per acre, Ohio at 56 bushels per
acre, and Nebraska at 62 bushels per acre. Other projected State soybean yields for 2021 are Indiana at 57
bushels per acre, South Dakota at 41 bushels per acre, North Dakota at 26 bushels per acre, and Wisconsin at 54
bushels per acre.

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Note --- For additional information contact Kent Thiesse, Farm Management Analyst and Sr. Vice President,
MinnStar Bank, Lake Crystal, MN. (Phone --- (507) 381-7960)
E-mail --- kent.thiesse@minnstarbank.com) Web Site --- http://www.minnstarbank.com/