Many farmers believe crop yield potential declined so far this summer due to wild weather variations and pest pressure, among other issues.
The portion of the crops rated good to excellent, 65 percent for corn and 62 percent for soybeans, were down 11 and 9 percent, respectively, this week compared to a year ago.
But it appears USDA will wait to make any adjustments to its yield estimates until at least next month, after it collects its first field-based data of the season.
The Ag Department left its U.S. crop yield estimates unchanged at 170.7 bushels per acre for corn and 48 bushels for soybeans.
The yield estimates combined with a slight bump in acreage estimates pushed total production estimates to 14.255 billion bushels of corn (up 190 million bushels from last month) and 4.26 billion bushels of beans (up 5 million bushels).
“We’ve seen the soy market backing off,” Brian Basting, market analyst with Advance Trading, said during a teleconference hosted by the Minneapolis Grain Exchange. “Corn was probably the most bearish of the crops.”
USDA last week raised its corn production estimate in Argentina by 1 million metric tons while it maintained a record corn production estimate in Brazil.
“There will be a lot of competition coming on the corn export side from South America this fall,” Basting said.
USDA subsequently raised corn ending stocks by 215 million bushels to 2.325 billion bushels. Ending stocks of soybeans, on the other hand, slipped by 40 million bushels to 410 million bushels.
But both markets, along with wheat, declined after USDA released its monthly world ag supply and demand estimates. An improved weather forecast was among the culprits for the price dip, according to Basting.
“The market here in July is going to be ultra-sensitive with any changes in the forecast,” he said. “The weather forecast was leaning toward less heat and maybe a little more rain week than originally thought.
“As we speak, the crop is either being made or hurt by the weather,” he noted.
USDA noted in its report that the weighted average precipitation in June was below normal in the major corn-producing states. But it was not an extreme deviation from average.
“A case could have been made to lower (the corn yield estimate) by 1 to 2 bushels,” Basting added.
USDA pegged 2017-18 season average prices in a range of $2.90 to $3.70 per bushel for corn (down 10 cents at the midpoint) and $8.40 to $10.40 for beans (up a dime at the midpoint).