It is no surprise that ever since the August supply and demand report was released, we have had disagreement on the numbers. One of the biggest questions is on corn yield, where several private analysts feel the average for the United States is higher than what the USDA is projecting of 174.6 bushels per acre. This is based on thoughts that not enough field collected data has been collected, and once it is, the yield will increase.

These thoughts are being confirmed by the early yield data that is coming out of the southern United States. Corn harvest is underway in the Deep South and we are starting to receive more yield data. Many reports from this area are putting corn yield near 180 bushels per acre. This is well above normal for that region. While there will be parts of the United States that will see corn yields well below this, there are also those that will be well above, which is favorable for a high national average.

Corn demand is just as much of an unknown as production at the present time. The same analysts who feel corn production is too high also believe corn usage is being underestimated. On the domestic side it is believed ethanol and feed usage both need to be adjusted higher. It is also believed that U.S. corn will be needed to help cover the 500 million bu loss in Brazil production this year. While this is possible, there is a record corn crop in Ukraine that will help with this as well.

We are already starting to see attention in the market shift forward to the September WASDE report. This is because this is the first of the year to include field collected data. Even so, some analysts doubt the accuracy of the release and instead are focusing on what will come out of the October release. At that point, we will have more hard harvest numbers and not have to rely on estimates and their uncertainty.

While early, we are seeing some very early corn harvest start in the U.S. Deep South. This is not surprising as farmers in that region of the country planted their crops as soon as possible to capture the sizable inverse that was seen in corn values. This is also putting corn into the supply line sooner than usual. Very little yield data has been given on this corn, but farmers in the area are hoping for record production.

Volatility is starting to build in the US cash market. This is not uncommon as we approach the fall harvest season and new crop inventory starts to become available. Even where harvest has yet to take place buyers are judging their current coverage versus what they may need until new crop inventory is delivered. As expected, this is more of a factor in soybeans, even though reports of early corn harvest are already coming in.

Even though attention is shifting to the U.S. harvest season, we are still hearing debate over U.S. acres. Losses are being reported in the Upper Plains where drought continues to impact wheat production. We are now seeing doubts on corn acres as fields are being chopped for cattle feed in regions of significant drought. This means less corn for grain use and will undoubtedly affect our production figures.

When it comes to U.S. acres, we are also seeing more interest on next year’s planting possibilities. Fertilizer values are expected to increase substantially in the country, with some regions of the Corn Belt seeing costs rise by 50 percent. This is mainly from demand, but also from supply issues around the globe. It is believed these factors will drive fertilizer values next spring to their highest level since 2015 and possibly to the record costs seen in 2008.

Farmers in Brazil are also making projections for next year’s plantings which will begin in the very near future. Early indications are Brazil farmers will seed 100 million acres of soybeans this coming year, a 3 percent increase from the crop that was just harvested. This will be the 15th year of elevated soybean plantings in Brazil and will continue to increase their share of global trade.

Total acreage in Brazil will increase by 7 percent this year and may be even higher given the favorable returns farmers are seeing. This expansion will all come from the northern regions of the country where pastureland is readily and easily converted into production acres. This is also where Brazil has seen the most improvements to infrastructure, including export terminals.

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