Update for September 2nd, 2022
U.S. Corn Crop Ratings Slip Along with Global Crop Conditions
The weekly USDA corn conditions report indicated yet another decline in the GD/EX U.S. corn rating. This week saw a 1% reduction from the previous week down to 54%. States that have ratings at 65% GD/EX or higher include: Iowa, Illinois, North Dakota, Minnesota and Wisconsin. States struggling with 50% GD/EX or less include: Nebraska, Kansas, Colorado, Tennessee, Kentucky and North Carolina.
The weekly USDA soybean ratings were unchanged at 57% GD/EX, slightly behind the 5-year average of 61%. States with GD/EX ratings at 65% or higher include: Iowa, Minnesota and Wisconsin. States with GD/EX ratings at or below 50% include: Nebraska, Kansas, Kentucky and Tennessee.
Last week the Pro Farmer Crop Tour finalized its estimates for the 2022 U.S. corn and soybean crops. More estimates will filter in up till the September 12th USDA report but this week the private group, StoneX released its updated yield estimates and the projections are drastically different than Pro Farmer. The latest StoneX estimate was lowered to 173.2 bushels per acre from 176.0 in August, total corn production was pegged at 14.168 billion bushels. They project the average 2022 soybean crop at 51.8 bushels per acre a slight increase from the August estimate of 51.3 bushels per acre, total production was set at 4.490 billion bushels. State-by-state estimates based on StoneX surveys are shown in the maps below, the first map shows the groups August data the second map is the updated map for September.
Last year the corn estimate following the Pro Farmer tour ended up being an exact match with the final 2021 USDA national corn average of 177 bushels per acre. The Tour accuracy is not always that good, the level of accuracy has varied from year to year and only time will tell how close this year’s estimate of 168.1 bushels per acre will be to the final USDA national yield. A chart comparing yearly Tour estimates with the USDA final since 2012 is included below.
Last year the corn estimate following the Pro Farmer tour ended up being an exact match with the final 2021 USDA national corn average of 177 bushels per acre. The Tour accuracy is not always that good, the level of accuracy has varied from year to year and only time will tell how close this year’s estimate of 168.1 bushels per acre will be to the final USDA national yield. A chart comparing yearly Tour estimates with the USDA final since 2012 is included below.
New Covid lockdowns in China are always concerning to the soybean market and this week the enormous city of Chengdu in southwestern China was ordered to lockdown. Western regions of the country had largely not been affected by Covid and lockdowns up to this point but now the 21 million people that live in this city are facing a lockdown, the first since the city of Shanghai which was locked down for 2 months earlier this year. Traders are worried about the economic slowdown that may result from the lockdown of Chengdu. The city is home to Intel and other tech firms as well as Toyota and Foxconn Technology group, the world's largest iPhone assembler.
USDA has reported a flash sale of 6 million bushels of soybeans to China for delivery during the 2022/23 marketing year that began yesterday. There are rumors that the Chinese are looking to add to this order with a much larger purchase but until the weekly export sales data becomes available again in a couple of weeks there will be no confirmation of this. Large soybean purchases from China are considered normal for this time of year.
Crop conditions around the world are declining. Consultancy Agritel upped the estimate of this year’s soft wheat crop in France and at the same time warned that this top grain producing nation is expecting its worst harvest this century. For corn the group expects the French harvest will be “catastrophic” as production is forecast at the lowest total in the 21st century totaling only 10.8 MMT. For the entire EU, Agritel expects corn production will hit a 15-year low of 53.8 MMT which is very similar to estimates from private firms. (Reuters)
South Africa’s Crop Estimates Committee (CEC) foresees the 2022 corn harvest will total 8% less than it did a year ago. Total production is expected near 15.004 MMT down from 16.315 MMT in 2021. Of this total 7.367 MMT is yellow corn used mainly for animal feed the remaining 7.637 MMT is white corn which is used for human consumption.
Ukraine continues to successfully export ag products from their functioning ports. Tuesday grain silos located near Mykolaiv, Ukraine’s 2nd largest port, were hit and damaged by Russian shelling of the city. There are several other grain terminals located in Mykolaiv as well, several of which had been hit in earlier fighting. The nation’s Agrarian Council, an organization that represents farmers within the country, expects the wheat harvest in 2023 will be much smaller due to a 30-40% reduction in planted acres. Farmers in Ukraine are dealing with financial issues and other problems that are a result of the invasion. The wheat harvest in 2021 (prior to the invasion) totaled 33 MMT vs 19 MMT this season and an estimated 15 MMT in 2023. There is concern that even acres that do get planted will not produce average yields as the group expects that high fertilizer costs will deter usage causing a drop in yields.
The World Meteorological Organization is predicting the first mysterious “triple-dip” La Niña of the century. This means that for 3 straight years the weather phenomenon known as La Niña has affected climate patterns like the widespread drought and flooding seen around the globe. The current pattern began in September 2020. The WMO gives the pattern a 70% chance of lasting through November and a 55% chance it will remain from December 2022 to February of next year.
The weather for the long holiday weekend looks mostly dry and sunny across the Upper Midwest. The streak of warm, dry and sunny skies is forecast to continue through next week as well…Get out and enjoy!
