Crop Conditions and Yield Estimates Ahead of Next Week's USDA Report
Updated: Sep 13, 2021
Update for August 6th, 2021
Again, this week U.S. corn crop conditions were downgraded. While it’s normal for ratings to go down by about 1% per week during this point of the growing season this week GD/EX ratings dropped by 3% to 62% vs 72% at this same time a year ago. Some of the key results:
Perhaps most significant is the further decline in the Iowa corn crop which fell by 3% this week to 62% GD/EX which is 12% lower than a year ago.
Minnesota fell another 2% to 36% GD/EX vs 77% last year.
North Dakota lost another 3% in GD/EX and now sits at a low 18% vs 52% last season.
Other states of note with worsening conditions-Kansas, Missouri and Colorado.
The USDA estimates that 91% of the corn crop is silking and 37% is in the dough stage and is maturing ahead of the average pace. Average yield estimates continue to range widely from sub 175 to over 180 bushels per acre. Next Thursday, August 12th the USDA will report the results of their surveys and satellite estimates which should help pinpoint a more accurate average national corn yield.
If we see little increase in demand and the average U.S. corn yield comes in at +175 bushels per acre some analysts believe that corn prices could retest sub $5.00 per bushel. One important issue to continue to watch is the domestic production problems in Brazil which are limiting the bushels available for export this season. In addition, low river levels in Argentina are limiting the transportation of agriculture products which is causing delays in meeting their export demand. This could mean more demand for U.S. bushels. There are reports that China may be re-entering the U.S. market sooner than expected and many analysts foresee a large percentage of the corn bushels that had been booked for shipment out of Brazil switching over to U.S. exporters.
Estimates on Brazil’s Safrinha corn crop continue to be revised and lowered. AgRural lowered their estimate from 54.6 MMT down to 51.6 MMT and projects the country’s total corn crop at 82.2 MMT. StoneX has also reduced their outlook for total production to 87.1 MMT. Next week we will find out if the USDA will again revise its estimates for the Brazilian crop. “The general idea is that US export demand will remain stout given the ultra-light crop in Brazil. Remember, the Brazilian crop was estimated to be near 110 MMT ahead of the growing season. A crop of 85 MMT would be the equivalent of the US crop falling from a 179 bushel per acre trend to a realized yield near 138 bushels per acre, a real disaster!”
Estimates for U.S. crops have also been released ahead of next weeks USDA report. StoneX conducted a customer survey and has based their numbers from that data. The survey calculated an Iowa corn yield of 199 bushels per acre and 203 bushels per acre in Illinois. This is much different than what many expected considering the large portion of the state of Iowa that has received less than ideal growing conditions this season. In general Illinois’ crop was expected to be good, maybe record setting but yields in Iowa had been projected to be considerably lower.
U.S. soybean GD/EX crop ratings improved by 2% to 60% this week vs the average of 65%. This surprised the trade which had expected to see a 1% decline on the week. Several states saw crop improvements including:
Illinois with a 3% improvement
Indiana, Ohio and South Dakota were each 4%
Iowa was unchanged on the week
Several states received a reduction in the week conditions including:
Minnesota, Missouri and Nebraska which each declined by 2%
Kansas was lowered by 3%
86% of the U.S. soybean crop is blooming vs the average of 82% and 58% are setting pods vs the average of 52% for this point of the season. A couple of issues facing soybean demand include the negative crush margins in China due in part to altered feed rations/recipe and new Covid lockdowns within the country. Additionally, U.S. domestic crush numbers for June were disappointing, off 15 million bushels from last year’s June crush of 177 million bushels.
Farmers from the world’s largest soybean producing and exporting nation of Brazil are expected to increase soybean plantings for the 15th year in a row. When soybean planting begins in September a 4% increase in acreage is projected which could bring total soybean acres to slightly over 100 million during the 2021/2022 cycle with an overall production of 144.06 MMT. (Rueters)
Last week the U.S. Department of Agriculture confirmed that African Swine Fever has made its way to the Dominican Republic. According to the D.R. Agriculture Ministry the nation is working to restrict the movement of hogs in the country and has mobilized their military in an attempt to help prevent any further spread of the highly infectious and deadly disease. This has raised concerns regarding the increased risk for transmission of the disease to the United States and Mexico. (Reuters)
Rain is expected to return to the U.S. Corn Belt this weekend and into next week as well. The consistency found in the latest models regarding the predicted coverage area and precipitation totals gives forecasters more confidence in the likelihood of their accuracy. Conditions are developing that can form storm clusters that have the potential to produce heavy precipitation and impressive rainfall totals. In addition, above normal temps are also on the way and will arrive in the western Corn Belt today and spread across the region by tomorrow and last through at least the next week.
The EURO through next Wednesday
The GFS through next Wednesday
The Weather Prediction Center blend through next Wednesday