Crop Condition Comparisons and Yield Estimates - Thursday, 27 July 2017

Informa has updated and reduced their forecast for U.S. corn production by -287 million bushels to 13.9 billion bushels which is -1.3 billion lower than a year ago.  This is a result of an overall decrease in expected yield for 2017.  Earlier in the growing season the group forecast a national average yield of 169.7 bushels per acre and have now lowered that expectation to 166.2 which is -8.4 bushels lower than the record hit last season. An El Niño weather system is still in control of the weather patterns in the U.S. This particular system is slightly different than typical El Niño patterns because it continuously strengthens and then weakens. In previous seasons when such a pattern has been present the corn yields have tended to run approximately -8% below trend which would bring the U.S. to a 161 per bushel average this year, just below current trade estimates.  Kevin Van Trump of the Van Trump Report also agrees that the overall potential corn yield has been reduced and doubts that the USDA projected yield of 170 bushels per acre is accurate any longer for this season, “I’ve said for several weeks, this crop looks much closer to a 160 type yield than the 170 the USDA has forecast.  I also believe we’ve seen the highest estimate for “harvested acres” which eventually could work their way lower, meaning perhaps sub -13.5 billion in total U.S. production…The bears continue to argue that even if U.S. production tips back to the 160 to 163 area, there is still plenty of excess ending stock and that U.S. demand might soon run into stiffer headwinds as both Argentina and Brazil are flush with record inventory.” Van Trump advises producers to keep in mind that even if we end with a final U.S. average yield near 160 it might not push corn prices much above $4.30 to $4.40 per bushel.

This week the USDA corn crop condition ratings in the Good to Excellent category fell by 2% from a week ago to 62%, this compares to the 2016 rating of 76% at this same time. Here is a comparison from a few states with considerable ratings differences between last year and this year:

  • Wisconsin 70% this year 86% last year
  • Texas 74% this year 59% last year
  • Illinois 63% this year 82% last year
  • Indiana 47% this year 75% last year
  • Colorado 57% this year 79% last year
  • Tennessee 86% this year 65% last year
  • Nebraska 61% this year 79% last year
  • Iowa 68% this year 82% last year
  • South Dakota 28% this year 60% last year
  • North Dakota 44% this year 78% last year

The USDA also lowered the overall ratings for soybeans in the Good to Excellent category by -4% down to 57%.  Listed are some of the most notable.

  • North Dakota this year 41% vs 71% last year
  • Illinois this year 59% vs 77% last year
  • South Dakota this year 25% vs 61% last year
  • Ohio this year 47% vs 64%  last year
  • Indiana this year 47% vs 73% last year
  • Nebraska this year 69% vs 77% last year
  • Iowa this year 62% vs 81% last year

U.S. exports numbers for last week were encouraging with a reported 21.9 million bushels of soybeans loaded, 16.6 million bushels of wheat and 36.8 million bushels of corn. Soybeans offered onto the global market from Brazil have been lower than in recent years.  Producers in Brazil are storing more of their bushels than usual which has allowed additional exports out of the U.S. Given the export pace it is quite possible that the USDA will need to raise the soybean export projection by 100 million bushels.

Reuters has reported that a series of “fast-paced NAFTA talks” have been agreed upon by U.S. Mexican and Canadian officials.  The timetable allows for 7 rounds of discussions each 3 weeks apart.  This could allow the discussions to wrap up before the Mexican officials get too busy with campaigning for elections which will begin at the beginning of next year.  U.S. officials are hopeful that the negotiations will be completed by the end of 2017, Canadian officials don’t believe that this timetable is possible and that to “modernize the pact in a serious way will take two years”. The first round of talks will take place August 16-20th in Washington D.C.

Beginning this week and for the remainder of the growing season much of the trade’s attention will be placed on growing conditions for the soybean crop.  A cold front is expected to bring rainfall to the upper Midwest and other nearby regions.  Rainfall amounts over the 5 day period are forecasted to range from 1 to 3 inches across eastern areas with lesser amounts as you move to the Plains.  The map shown below illustrates the significant difference in precipitation amounts so far this month, especially when comparing the eastern and western Corn Belt.

​​The following 2 maps are official forecasts from NOAA for the upcoming month of August.

 

Official Forecasts
August 2017

PLANTING PROGRESS

 

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