MCHENRY, Ill. – Despite projected increases in corn and soybean production this year, the total supply of both crops isn’t expected to change much, according to the chief strategist for Allendale, Inc.

The company is forecasting U.S. farmers will produce 15.3 billion bushels of corn, based on 93.4 million acres planted and a trend yield of 179.7 bushels per acre. For soybeans, Allendale is forecasting a record crop of 4.54 billion bushels, with 90 million acres planted and a trend yield of 51.1 bushels.

Corn production would be an increase of 1.2 million bushels over 2020 and soybean production would be up 407 million.

“So yes, we do have a good size increase in production coming,” Rich Nelson noted. “There are more acres and we certainly expect a return to very strong yield numbers, but this does not result in a massive total supply increase.”

Allendale hosted its annual Winter Ag Leaders Conference Series Jan. 27-28.

If the projected numbers are realized, total corn supply would increase from 16.1 billion bushels to 16.5 billion. Ending stocks are expected to be 1.2 billion bushels for old crop corn and 1.5 billion for new crop.

It may take until 2022 for the supply situation to significantly improve, he stated. The same may be said for soybeans, Nelson added.

“Yes, we’re going to have 6.9 million extra acres (of soybeans) and yes, we’re going to have record production, assuming trend yields, of 4.5 billion bushels,” he explained. “That will be 407 million bushels over this past fall’s harvest. But just like with corn, the problem is it takes two years to fix supply deficits, meaning you’ve still got to fix beginning stocks.”

The supply of soybeans, if the numbers are realized, would only increase 17 million bushels over last year, Nelson said.

Exports, including those to China, are having an impact on U.S. soybean and corn supplies, he noted. Recent U.S. soybean sales have been running 37 percent ahead of last year. The United States has booked 38 million of China’s 100 million tonnes of soybeans purchased in the current marketing year, Nelson pointed out.

“China has returned to our market. China has realized, regardless of the trade deal, that their raging demand cannot be filled by just Brazil. So even separate from the trade deal, China would have had to return to the U.S. market.”

The situation is similar for corn. “For right now, the U.S. is the main shop in town,” Nelson said. “Of the roughly 22 million tonnes the U.S. ag attaché suggests that China will buy, we estimate about 19-20 of that would come from the U.S.”

In the last few weeks, U.S. corn exports are running about 40 percent higher than the five-year average pace, he said.

Weather outlook

Drew Lerner, president of World Weather, Inc., said during the webinar he expects yields for corn and soybeans to be close to trend in 2021. He cautioned, though, that weather expectations could change as spring and summer draw closer.

“I really don’t think I see anything right now that would dramatically cut into the production,” he noted. “But there’s certainly potential that that forecast is going to be adjusted. I’m just not convinced that we’re not going to see a broader based drying. But there’s too much unknown here for me to go down that road.”

One reason for some uncertainty is how the current La Nina weather event will play out this year, Lerner said. In early January, the National Oceanic and Atmospheric Administration (NOAA)’s forecast model suggested La Nina would steadily weaken through the spring, become a minimal event in the summer and then maybe intensify again into autumn. Recently the agency’s model “got ahold of something and it started getting much more aggressive with an intensification of La Nina occurring in late spring and summer,” he explained. “This is what has the world all abuzz right now.”

Lerner doesn’t agree with the recent NOAA forecast. “I think what you’re going to see happen is the model is going to correct itself and get back into something more similar to what it was predicting before,” he said.

If the revised NOAA model is accurate, drier tendencies could surface into spring and summer, Lerner said.

Based on his expectation that La Nina will weaken into spring and summer, he said he’s expecting above normal temperatures in the spring in most of the Farm World coverage area. The exceptions are eastern Ohio, Michigan’s Upper Peninsula and the northern and eastern sections of the Lower Peninsula, which are expecting near to above normal temperatures. For the summer, the entire area is expected to have normal to near to above average temperatures. The exceptions are western and central Iowa, where above normal temperatures are forecast.

As for precipitation, the entire coverage area should see normal to near to below normal amounts in the spring. In the summer, most of the area should have normal to near to below normal conditions. Some areas – the bottom two-thirds of Ohio, Michigan’s Upper Peninsula and parts of the western and central areas of the Lower Peninsula – will see below normal precipitation.