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The US maize harvest is now forecast to total around 353 million tonnes (mt), slightly ahead of the June estimates.
According to the latest USDA World Agricultural Supply and Demand Estimates (WASDE) report, planted area of maize has increased by 1% from 2018 area to 90m acres.
This has caught the industry and markets by surprise as it was widely anticipated that planted area would be down on last year.
US farmers have experienced a difficult spring, with consistent wet weather making planting challenging.
Flooding and spring rain delayed planting, caused crop failure and also lead to fields not being planted in many areas.
Soya bean area on the other hand has seen a 14% decrease on 2018 to 76.7m acres. Soya bean production is now forecast at 3.68bn bushels (144mt), down 165m bushels (19%) on 2018 levels.
Yield estimations
US maize and soya bean crops still have a long way to go, so this report is based purely of the current condition of crops.
The WASDE report shows that key grain producing states (Illinois, Indiana, Iowa, Minnesota etc) all have lower forecast yields than 2018.
Of the other major grain-producing states, only Missouri is forecast to have higher yields than 2018, although parts of this state suffered from drought last year.
While average maize yields are expected to be lower this year (estimated at around 4.6t/ac), the increased area has dampened any hope of a market lift.
Market reaction
Grain markets came under pressure as analysts had been expecting a lower estimate of maize area and yield.
Maize futures for December delivery fell to $3.93 a bushel (€137.9/t) on the Chicago Board of Trade following the publishing of the report.
Ethanol and exports
The report also predicts that less maize will be used in ethanol production. They also cut 100m bushels from export projections for the 2019-2020 marketing citing increased competition from Argentina, Brazil, and Ukraine. This means that there could be higher amounts of US maize remaining in the country to dampen markets there further.
In summary:
Maize: Production forecast at 13.9bn bushels (353mt). National average yield is estimated to be 169.5 bushels per acre (4.6t/ac). Harvested area is forecast at 82m acres, while planted acres sits at 90m.
Soya beans: Production is forecast at 3.68bn bushels (144mt). The national average yield is expected to be 48.5 bushels per acre (1.3t/ac). Harvested area is forecast at 75.9m acres, with planted area sitting at 76.7m acres.
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