Crop Rating Comparisons and NAFTA - Wednesday, 14 June 2017

Only 2 times in our history has the national average yield been above 170 bushels.  Early this year the USDA estimated producers in the U.S. would average 170.7 bushels per acre and have not made any adjustments to this estimate as of yet.  The USDA also has the new-crop ending stocks forecasted at over 2.1 billion bushels, an amount many in the industry believe is exaggerated.  Like always the weather is in the driver’s seat and based on overall production the states listed below are the areas being watched most closely and they are:

Indiana and Ohio- together these 2 states combine for closely 10% of the total U.S. corn production.  To date these states have been experiencing difficult growing conditions.  In this week’s ratings the USDA showed Indiana with only 44% of their corn crop in Good to Excellent condition (-29% lower than a year ago) and Ohio has a Good to Excellent rating of 50%. (-15% lower than last year)

Illinois- this state raises around 13% of the U.S. corn crop and at this time only 58% of their crop is rated as Good to Excellent. (-17% lower than a year ago at this time)

North and South Dakota together account for slightly less than 10% of the total U.S. corn crop.  When combined with Minnesota the amount rises to 19% of the U.S. total corn production.  (The Good to Excellent rating for North Dakota currently sits -28% lower than a year go South Dakota is -27% lower and Minnesota is showing the same conditions as a year ago)

Going back and looking at the 2 times in history when the average yield exceeded 170 (2014 and 2016) and comparing the Good to Excellent crop ratings in those years to this year a stark difference emerges. 

YR 2014

Illinois conditions were +15% higher

Indiana conditions were +26% higher

Minnesota conditions were +3% higher

North Dakota conditions were +22% higher

South Dakota conditions were + 23% higher

Ohio conditions were +28% higher

YR 2016

Illinois conditions were +17% higher

Indiana conditions were +26% higher

Iowa conditions were +3% higher

North Dakota conditions were +19% higher

South Dakota conditions were +12% higher

Ohio conditions were +18% higher

The USDA lowered the corn crop conditions by -1% this week to 67% rated GD/EX.  Kevin Van Trump of the Van Trump Report commented on the ratings this week, “I see the “Worse Than” group being much more impactful than the “Better Than” group.  Hence even more reason to believe the U.S. yield needs to be worked lower.” When you look at the map the states showing the “Better Than” conditions this year: Pennsylvania, Kentucky, Colorado, Tennessee, Texas, Nebraska and North Carolina are not the states that tend to produce a large portion of the nation’s overall corn crop.  The “Worse Than” group of states like: Indiana, North and South Dakota, Illinois, Ohio, Iowa, Wisconsin, Missouri and Kansas are the states that supply the largest volume of production and are seeing the worst growing conditions.

The countries soybean crop is 92% planted and 77% emerged according to the USDA.  The initial Good to Excellent rating for soybeans sits at only 66% this year compared to 74% a year ago. Just like with the corn conditions the “Worse Than” states are more of the notable and significant soybean producing states than the states rated as “Better Than” a year ago.

States with Good to Excellent ratings higher than last year are Arkansas, North Carolina, Tennessee, Kentucky and Minnesota.

States with Good to Excellent ratings lower than last year are North and South Dakota, Indiana, Ohio, Illinois, Iowa, Kansas, Wisconsin, Nebraska, Michigan and Missouri.

Governors and premiers from Mexico, Canada and the U.S. will hold a summit in Rhode Island on July 14th to discuss their priorities for NAFTA.  This meeting is crucial and will discuss the function that states and local governments will have in the renegotiation process of the trade agreement.  President Trump has commented that the purpose of the meeting is to make the free trade agreement great again-for all three nations and for their people.

The recent pattern change over the weekend that brought in much-above-normal temperatures is due to a change in the upper-level pattern and should continue for the remainder of the week.  The heat dome is expected to remain in place and control the weather in the Midwest into next week.  A cool front is expected to push through the Midwest lowering temps by mid to late week.


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