Each month, economists at Creighton University survey bank CEOs in a 10-state region to measure their impression of the rural economy.
The data are compiled into the Rural Mainstreet Index. This month the index slipped to 55.8 from July’s 57.3, but it remains well ahead of the 47.1 recorded last August. Any reading above 50 suggests economic expansion.
The rural economy, of course, is highly influenced by commodity prices. And in a separate report that moved the markets this week, the Agriculture Department predicted U.S. farmers will harvest considerably less corn this fall than the record crop it predicted just last month.
According to USDA, total U.S. corn production will amount to 13.76 billion bushels, down nearly 190 million bushels from last month’s guess. The government pegs the national average corn yield at 154.4 bushels per acre, up a whopping 25 percent from last year’s drought-reduced harvest.
Government bean counters also foresee fewer soybeans in America’s fields than previously believed. USDA now calls for total U.S. production of 3.26 billion bushels down more than 5 percent from last month’s estimate. The average soybean yield is expected to decline to 42.6 bushels per acre. That’s also down nearly 5 percent from last month’s guesstimate.
Total U.S. wheat production is estimated at 2.11 billion bushels on a national average yield of 46.2 bushels per acre -- virtually unchanged from last month’s predictions.
Turning to its monthly supply and demand estimates, USDA decreased U.S. corn beginning stocks by 10 million bushels. Despite lower-than-originally-predicted yields in the Corn Belt, the government predicts robust production will result in corn ending stocks of 1.837 billion bushels.
Analyzed as a percentage of demand, the numbers add up to an ample domestic stocks-to-use ratio of 14.5 percent. If realized, that would be the highest corn stocks-to-use ratio in 7 years. Nevertheless, government analysts bumped their season-average price estimates up a dime from last month to $4.90 per bushel.
U.S. soybean ending stocks are predicted to fall nearly 25 percent to 220 million bushels.
An accompanying domestic soybean stocks-to-use ratio of 6.9 percent is the largest in three seasons. Nevertheless, after factoring strong anticipated global demand, the Agriculture Department increased its average price estimates by 60 cents from last month to $11.35 per bushel.
And the U.S wheat stocks-to-use-ratio is predicted to decline to 23 percent. That would be the tightest supply in five years. But it’s easily enough to meet domestic demand. And after considering estimates of increased global wheat production the figures prompted USDA to lower its season-average price estimate by a dime to $7.00 per bushel.