USA: USDA forecasts met with skepticism

In August, USDA released its crop production report amid a fair amount of skepticism that its forecast of both acreage and yield forecasts were too optimistic. The August U.S. average yield forecast for corn is very consistent with crop condition ratings in early August and with forecasts based on crop weather models, while the yield forecast for soybeans was well below that indicated by crop condition ratings and crop weather models, perhaps reflecting the lateness of the crop. Corn production is forecast at 12.3 billion bushels, down 6 percent from last year’s record, but up 17 percent from 2006. Corn yields are expected to average 155 bushels per acre, up 3.9 bushels from last year. Yield forecasts may remain high after August 1 if some late season rain is received in dry areas and if the crop reaches maturity without a widespread killing frost. Soybean yield prospects are more difficult to anticipate, with production forecasts at 2.97 billion bushels, up 15 percent from last year but down 7 percent from the 2006 record. Yields are expected to average 40.5 bushels per acre, down 0.7 bushels from 2007, while harvested area is expected to be 17 percent higher than in 2007.