Is U.S. corn yield headed for a below-average result? -Braun
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NAPERVILLE — Market participants may be budgeting for below trend-line U.S. corn yields this year, which is a common notion during hot and dry stretches, but a decent contingent backs the current expectation to tie last year’s record.
On Tuesday, I asked Twitter users for their best guess of U.S. corn yield, and the prevailing choice was 173 to 176 bushels per acre with 44% of the more than 1,000 respondents. Just 19% thought yield will not reach 173 bpa.
However, some 28% see yield landing between 176 and 179 bpa, which has happened three times in history, and another 9% think something above 179 bpa is probable.
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The U.S. Department of Agriculture’s trend corn yield of 177 bpa would tie last year’s high, and although the crop was planted later this year, it is in similar overall condition as a year ago based on ratings from USDA’s statistics service.
The 64% good-to-excellent score as of Sunday is below average for the date versus most high-yielding years, though the low-60s ratings did not deter analysts last August, as they projected a 177.6 bpa corn yield ahead of USDA’s influential August crop report.
July rainfall as a whole has been largely normal across most of the core Corn Belt, but in many areas, including in western states like Iowa, most of that rain occurred at the beginning of the month, reintroducing dryness concerns for some farmers.
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I asked U.S. corn producers on Twitter Wednesday morning about their current moisture situation. Of the more than 440 respondents by early evening, some 44% said they need rain immediately to preserve yield potential.
Another 30% said they could wait up to five days for rain and 26% of the voters’ corn would be OK without rain for eight days or longer.
I also asked the Crop Watch producers on Wednesday to use one word to describe the current mood toward their crop prospects. Six of the 11 offered a positive word, including all eastern belt participants. Two responses were neutral and three were negative.
The negative responses included “nervous” in western Iowa based on persistent dryness, “diminishing” in Kansas amid this week’s heat wave, and “dropping” in Nebraska, also weather-related.
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Weather forecasts as of Wednesday increased rainfall amounts for the next seven days across most of the Corn Belt, though most of the focus is in the east, while western amounts remain lighter-than-normal.
SCENARIOS TO PONDER
Base U.S. corn yield potential slightly increased following USDA’s June area survey, which showed national corn plantings at 89.9 million acres instead of the 89.5 million shown in March.
Using an average yield by state, the national average increases about 0.9 bushel per acre when using the June area instead of the March. This is driven largely by 900,000-acre combined loss in North and South Dakota, where yields are usually more than 20 bushels below the national average.
Average yields can be tricky due to some recent rare events like in 2019, when many high-yielding corn acres in states like Illinois were not planted, pulling down the national average. Iowa’s derecho in 2020 caused yield to drop more than 20 bpa off the averages in just one afternoon.
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But a 177 bpa national yield safely requires all states to exceed recent averages, even when dropping highs and lows. Top-producing states where average yields may be unlikely include Indiana, where weather has been unfavorable, but a strong result in Illinois, for example, could be offsetting.
Using USDA’s June harvested area by state, a corn yield of 176.8 bpa would result if every state equaled their third-highest yield of the last six years. The context differs by state, as the third-highest yield in Iowa is 1% below its record, 4% below in Illinois and Indiana, 2% below in Minnesota and 6% below in Nebraska.
That does allow some room for error among top states to still achieve the 177, and it is increasingly helpful if major states avoid catastrophes like North Dakota’s drought last year.
It won’t happen this year, but just for fun, national yield would end up at 186.5 bpa if every state matched its previous record corn yield. However, USDA projects this number could be a reality within less than five years. Karen Braun is a market analyst for Reuters. Views expressed above are her own. (Editing by Matthew Lewis)
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