Market analyst: Reproductive stage weather

07/23/19 — We are now at the reproductive stage for corn and soybeans, when weather becomes critically important for crops. The weatherman seems to be unsure what to call for a weather forecast during this stage, as we’ve gone from a hot/dry forecast a week ago, to cool/wet, to cool/dry, and now floating back to a warm/dry forecast for the next 2 weeks. Regardless, actual weather during this time frame is what is important, not the forecast. And all the reproductive stage will take place nationwide in the next 2-3 weeks.

Rain is falling today in the southeast U.S., but virtually no rain in the Corn Belt or west. Also the next 7 days will be very dry in the Midwest — virtually no accumulations of rain forecast anywhere but parts of Michigan. The forecast by private weathermen is calling for below normal precip the entire 14 days, and mostly cool weather the next 7 days, but then warm to normal to above normal temps in days 8-14 (warmer in the west). Some areas of the southeast will see below normal temps the next week, but the private forecasts are drier and cooler than the National Weather Service forecasts. The NWS is calling for warm/dry in the west, but warm to normal and even above normal precip in the east. So there is a bit of difference between the two forecasts (NWS warmer and wetter), but overall both have warmed the forecast considerably from yesterday’s cool forecast (which pressured the market). Therefore we have a higher market this morning as cool weather during reproductive stages (bloom and pollination) is bearish, but warm bullish (especially in southern states).

Crop conditions were out yesterday afternoon, 7/22, and the crop did not improve as expected. Instead, conditions of corn were down 1% to 57% rated G/E (vs. 72% last year), and soybean conditions were unchanged at 54% rated G/E (vs. 70% last year). Yield models are suggesting a 170.5 bu/acre corn crop (up 0.22 bu/acre from last week) and a 47 bu/acre soybean crop (down 0.75 bu/acre from last week). The soybean yield decline is the largest of the year so far and puts soybeans within fractions of its lowest yield estimate of the year. But corn yields seem awfully high at 170.5 bu, just slightly below ‘trend’ yield of 174 bu. So corn yield projections are only about 2% below trend, while soybeans are 4% below trend. That seems backwards when you look at the maturity of the crop, as corn is much more susceptible to yield loss from an early freeze than soybeans. Maybe they won’t show that until after a freeze occurs (if it does)?

Both crops are well behind average development, with corn only 35% silking (31% behind normal) and 5% dough (5% behind normal). Soybeans are 40% blooming (26% behind normal) and only 7% setting pods (21% behind normal). In contrast, cotton squaring is only 2% behind at 78%, and 4% behind setting bolls at 33%. Cotton conditions also improved 4% to 60% G/E, well above last year’s 39%. Sorghum is behind development at 27% headed (13% behind normal), and 16% coloring (6% behind normal). Sorghum conditions dropped 1% to 73% G/E, still well above normal and last year’s 49% rating. HRS wheat is 92% headed (2% behind normal), and conditions are still rated pretty high at 76% rated G/E, unchanged from last week and only 3% below last year. Barley is 90% headed (5% behind normal), and still rated 76% G/E (unchanged this week) and only slightly below last year’s 81% rating.

Winter wheat is 69% harvested, 10% behind normal but it has been advancing nicely with the warmer/drier weather in the west. Oat harvest is also going slowly, only 12% harvested (10% behind normal). Oat ratings dropped 4% yesterday to 64% rated G/E, down from last year’s 72% rating.

Soil moisture levels are finally drying out, with topsoil rated adequate/surplus dropping 3% to 76%. Subsoil moisture also is drying out, down 2% to 82% adequate/surplus. These levels are still much higher than last year at this time (62% topsoil and 63% subsoil) so that reiterates the idea that it might be too late to put much drought stress on the 2019 crop. Moisture levels of soils are still quite high, and drought probably is an issue that will not be high in importance in 2019. Instead, in 2019 the issue was too much moisture which caused 12-15 million acres of prevent planting (which USDA is still trying to add up), and also delayed planting of the remaining 240 million acres (mostly corn, soybeans, HRS wheat, and barley). The issue left is crop maturity at frost date for the late planted crop (due to excessive spring moisture), with corn the most susceptible to significant yield loss with an early frost (and maybe even an average frost). The old adage “rain makes grain” wasn’t true in 2019; maybe we need to restate it as “once planted, rain makes grain!”

A lot is going to happen to determine final 2019 yield potential in the next 8 weeks — frost date being perhaps the granddaddy issue of them all.