Barchart released a yield estimate on 6/02 for the 2020 corn crop. National yield was pegged at 172.4 bu/ac vs the preliminary USDA estimate on 5/10 of 178.5 bu/ac. The release did not include estimates for beginning stocks or acres. So, what impact would this adjustment have?
The most obvious is a decrease of 548 m.bu. of production from 15,995 m.bu. to 15,447 and total supply from 18,118 m.bu. to 17,570, assuming beginning stocks, acres, and imports remain constant. That does not mean that ending stocks would decrease by a similar amount because quantity demanded goes down when price goes up. Based on the Selective Hedging Supply and Demand Model, the projected average farm price would increase by $0.20/bu. If demand remains constant, there would be only a nominal impact on ending stocks. Please note the difference between quantity demanded moving up and down the demand curve versus the demand curve moving right or left. A change in supply does not, in itself, move the demand curve.