Abundant rain forecast in prime US soybean region, boosting yield: USDA

New Delhi — A forecast of 1 to 3 inches of rain during the coming days in the Upper Midwest may mean an increase for soybean yield estimates, the US Department of Agriculture said Wednesday.

Last week, in its World Agricultural Supply and Demand Estimates report for August, the USDA estimated the yield for the 2019-2020 marketing year (September-August) US soybean crop to be 48.5 bushels/acre, down 6% year on year because of heavy flooding across the Midwest in the spring, leading to delayed plantings. The market expectation for the US soybean yield was at 47.6 bu/acre.

The yield estimates may be revised upward if the Upper Midwest region experiences favorable weather in the coming weeks, especially in September, sources said.

The Upper Midwest region comprises six states, including top soybean producers Iowa and Minnesota. The region accounts for over 80% of total US soybean production annually.

The National Weather Service's six- to 10-day outlook for August 26-August 30 calls for cooler-than-normal conditions across the upper Midwest and the northern and central Plains, the report added.

The rain forecast in the Upper Midwest could pressure soybean prices, sources said.

SOYBEX FOB New Orleans soybeans for August loading were assessed at $337.40/mt, and SOYBEX FOB New Orleans soybeans for October loading were assessed at $334.09/mt Tuesday, according to S&P Global Platts assessments.

By August 18, 90% of the nation's soybean acreage had reached the blooming stage, 9 percentage points behind last year's level and 6 points behind the five-year average, the USDA crop progress report said.

Nationally, 68% of the soybeans were setting pods, 22 percentage points behind last year and 17 points behind the five-year average, the crop progress report said.

As of Sunday, 53% percent of the nation's soybeans were rated in good to excellent condition, 1 percentage point below the previous week and 12 points below the same time last year, it said.

Soybean harvest in the US is likely to be delayed by two-three weeks, on an average, due to historic delays in plantings on the back of unfavorably wet spring weather.

Due to late plantings, any unfavorable weather change in the coming weeks, such as frost, might drastically reduce the soybean yield estimates, sources said.

The US soybean production for 2019-20 is projected at 100.16 million mt, down 19% year on year the USDA said in its latest WASDE report released August 12.

-- Asim Anand, aanand@spglobal.com

-- Edited by Bill Montgomery, bill.montgomery@spglobal.com