We are starting to see more private analysts release yield estimates on corn and soybeans. We are already seeing corn yield estimates as low as 152.6 bushels per acre, down from the latest USDA estimate of 166 bushels.

While this low of a corn yield would cause ending stocks to decline, the soybean estimate is more concerning. Some firms have this number down to 42.4 bushels per acre, a yield that would eliminate soybean stocks altogether if usage does not decline.

Not all analysts are buying into the possibility of depleting soybean reserves, however; this is from the slow export loadings we have seen on that commodity. Export loadings are down 16 percent from a year ago on soybeans, which is a 4 percent greater decline that what was forecast.

Corn loadings are also less than expected, by 3 percent. These numbers give the indication old-crop demand may not be as great as trade has been thinking.

One of the greatest factors in soybean ending stocks is how many soybeans China will import this year. Since October China has imported 46.3 million metric tons (mmt) of soybeans, compared to 38.3 mmt for the same period a year ago.

This is a growth rate of 21 percent, well above the 7.5 percent increase the USDA is projecting. If this import pace continues, China will consume 183 million bushels more soybeans than currently projected.

Today’s soybean futures are in a delicate position. The soy complex has been demand-driven for the past several months, but is now starting to reach a point where demand is being rationed. Once this begins, there is no need to take values any higher regardless of carryout projections and estimates.

This is where the market is right now, as some crushers claim they will idle plants before running at a loss.

Trade remains uncertain over how many U.S. acres may be double-cropped with soybeans this year. Wheat harvest continues to run ahead of schedule, which will leave a larger window for the possibility of double-cropping if desired.

Some analysts believe fewer acres than initially thought will be double-cropped because of dry soil conditions in many regions of the Wheat Belt. Given current soybean values it will take a relatively small yield to make a profit on these acres though, which may encourage the activity anyway.

Weather remains one of the greatest fundamental factors in market at the present time. Conditions in the United States have been less than perfect, and it is starting to been seen in the weekly condition reports.

Trade is also concerned with weather in China, as hot, dry conditions there are thought to be stressing those crops and cutting yield as well. The fact that China continues to buy large volumes of soybeans at elevated values is giving credence to these beliefs.

While crop condition is not an accurate indicator of final yield, there are some similarities between ratings and crop size. In nine of the past 26 years corn ratings have declined from June to July, according to the firm F.C. Stone. Nearly every one of these years had a lower final yield. In just the past two years corn yield has dropped 11 bushels per acre from June to harvest.

Karl Setzer is a commodity trading advisor/market analyst at Maxyield cooperative. His commentary and market analysis is available daily on radio, in newsprint and on the internet at www.maxyieldcooperative.com

The opinions and views in this commentary are solely those of Karl Setzer. Data used for this commentary obtained from various sources believed to be accurate.

This commentary is intended for informational purposes only and is not intended for developing specific commodity trading strategies. Any and all risk involved with commodity trading should be determined before establishing a futures position.