Based on crop estimates available in September, the picture for corn, soybean and wheat yields is starting to become clearer for the Northern Hemisphere, although the numbers will likely change over the next three months.
In the United States, with a corn acreage of 90.7 million acres (Ma) and a record yield of 183.6 bushels/acre (bu/yr), the United States Department of Agriculture (USDA) projects a production of 15,186 million bushels (Mbu), down 1% from last year – still the second highest production level ever achieved. As for soybeans, the sown area is 87.1 Mbu, with a yield of 53.2 bu/year and production is expected to reach the record level of 4,586 Mbu, with an increase of 10.1% per year compared to to last year. For wheat, with a planted area of ​​46.3 Ma and a yield of 52.2 bu/yr, the expected harvest will be 1,982 Mbu, up 9.4% from 2023. In other words, for the United States, expect a recovery in wheat production, a bumper corn harvest and record soybean production.
Statistics Canada released its yield estimates in September. In Canada, the organization surprised the market a bit with a fairly high yield for wheat of 3.3 t/ha, while in the prairies there was very dry weather from the beginning of July to mid-August: production increased by 4.1% to 34.3 million tonnes (Mt).
The corn crop is forecast to decline 1.6 per cent, mostly due to Ontario, to 15.2 million tonnes, the second-highest level on record.
The soybean crop increased 3.1% thanks to Ontario and Quebec, reaching 7.2 million. Statistics Canada therefore expects a recovery in wheat production, a good soybean harvest and near-record corn production.
As for Ontario, production decreased by 3.8% for corn and 16.6% for wheat, mainly due to the decrease in planted areas. Soybean production increased by 6.9% to a record level of 4.3 million tonnes thanks to record acreage and excellent yield.
In Quebec, Statistics Canada predicts an excellent yield of 10.3 t/ha for corn. For soya and wheat, a yield of 3.1 t/ha is expected. Despite the decline in sown area, corn production increased by 8.6% to 3.6 million tonnes, while soybean production increased by 4.9% to a record high of 1.33 million tonnes thanks to a record sown area. Wheat production decreased by 6.8% due to the decrease in sown area.
Futures contracts have been trending lower since highs reached in the spring of 2022, when the market was in a panic over Russia’s invasion of Ukraine.
However, the crop picture that is emerging in North America is one of abundant, even record, production of the three major grains, both in the United States and Canada. Should we therefore conclude that the price decline will continue? Such a conclusion is premature. On the one hand, global demand for grains is robust, as we have seen in recent weeks. On the other hand, on the supply side, the international market is increasingly led by Brazil for soybeans, but also for corn. In Brazil, soybean planting begins in mid-September, but the key period is from early October to late November. As for corn, this is the second harvest which represents almost three-quarters of national production: safrinha corn will be sown in February-March 2025, after threshing the grain.