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Source: Farm Futures news release

A challenging year of weather and finances could mean smaller corn and soybean harvests this fall, according to Farm Futures latest survey of growers. Corn production could fall 10% compared to the record crop of 2016, due to lower yields and acreage. The falloff in the soybean crop could be smaller, perhaps around 2%, with a big increase in acreage helping to offset a 9% drop in yields.

USDA puts out its first production estimates Aug. 10 based on data from farmers and their fields. Up until now the agency has used yield numbers that assume normal growing season conditions - something that wasn't the case in the first half of the summer.

Farmers told the magazine they're hoping to bring in a corn crop of 13.618 billion bushels, with an average yield of 163.5 bushels per acre. That compares to the 15.148 billion bushels harvested in 2016, when farmers benefited from record yields of 174.6 bpa. The survey showed this year's yields down 3.4%, while high costs and negative margins caused growers to cut corn plantings by 4.3% in the spring.

Growers in the northwest part of the growing region suffered the biggest yield losses. Corn yields in South Dakota were estimated as low as 108 bpa, down from 161 a year ago, with growers in Missouri, Indiana and Ohio seeing smaller losses.

For soybeans, Farm Futures found yields of 47.5 bpa. While that is a significant decline from the record achieved in 2016 of 52.1 bpa, growers rushed to plant soybeans this spring, boosting acreage 7% to an all-time high of 89.5 million. Production could fall to 4.214 billion bushels, 93 million less than the 4.307 billion harvested in 2016.

Farm Futures senior market analyst Bryce Knorr said lower corn production could be enough to stabilize that market, and perhaps produce rallies to move grain out of farmers' hands after harvest.

"These initial yield estimates can and probably will change," Knorr said. "Corn yield potential in our survey ranged from 159.7 bpa to 167.3 bpa. Our other models based on crop ratings, weather and the Vegetation Health Index show a similar variance, coming in anywhere from 161.5 to 168.6. But a 13.6 billion bushel crop has the potential to cut carryout at the end of the 2017-2018 marketing year to 1.87 billion bushels, producing an average cash price of $3.70, 40 cents above USDA's last projection."

Knorr said August weather will be important to final yields. That's particularly true for soybeans, which are still setting pods.

"Forecasts for a mild August with normal precipitation could bump yields higher," Knorr said. "A 4.2 billion bushel soybean crop could tighten soybean carryout modestly, but ending stocks might still run around 400 million bushels for the 2017 crop. That could make it hard to rally without a weather threat in South America. Most of Brazil's growing region experienced below average rainfall over the past 30 days, a factor that could become important headed into fall."

Farm Futures surveyed nearly 1,200 growers from 41 states July 17 to Aug. 2. Farmers were invited by email to fill out a survey questionnaire online. Over the past 10 years the survey averaged a 2.7% difference from USDA's August estimates on corn, with soybeans at 2.4%.

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