Today at noon EST, the USDA released its October Crop Production Report, which included forecasts for the end-of-season US corn and soy yield. This report is a major event for the corn and soy markets every year, and this season was no different.
Today’s report provided a 2018 US corn yield forecast of 180.7 bu/ac, a 0.6 bu/ac decrease (0.3%) from the September NASS figure (181.3 bu/ac).
For soy, the production report provided an end-of-year yield forecast of 53.1 bu/ac, a 0.3 bu/ac increase (0.6%) from the September NASS figure (52.8 bu/ac).
What do these numbers mean?
If these estimates hold (as they have from September to today), they will represent the largest corn and soy harvests in US history. In which case, it's an incredible testament to national weather conditions as well as the continued progress of inputs technology and farming practices.
How does this compare to the TellusLabs view?
Our early-October corn outlook remains below that of the USDA - it has been consistently below the USDA (and much of the market) since launch in July but, as of today, it has converged slightly with both government and market consensus (which was at 181.8 bu/ac per Reuters yesterday).
Our early-October soy outlook remains below that of the USDA and it has been below the USDA figures since mid-August and below the 53.3 bu/ac the market expected (also per Reuters).
In both cases, we remain skeptical of these high yield figures and would assume some downward movement between now and the end-of-season NASS Production report in January.
A word on TellusLabs
TellusLabs is a Boston-based satellite imagery and machine learning company. For the past two years, we have predicted US corn and soy yields within 1% of the USDA and over three months in advance. Naturally, we are keen to see how the season progresses...Please reach out with any questions, thoughts, or views!