Corn yields rise, beans steady
07/21/15 — Pro Ag correctly anticipated that corn and soybean prices were on the brink of topping last week, selling aggressively into the recent rally. That was because the Pro Ag yield model had been rising during the whole month of July, with the jump from 161.8 bu/acre to end the month of June, only to rise the next 3 weeks to 168.1 bu/acre yesterday.
The corn yield model rose again yesterday by 1.5 bu/acre to 168.1 bu (on unchanged G/E conditions at 69%), now above USDA’s July estimate of 166.8 (which has been their yield estimate all year). Obviously, the crop was hurt by the heavy June rainfall, but has been improving since then. We now have essentially our highest yield estimate of the year. More importantly, the crop is still improving rapidly in July, and if that pace of improvement continues it is still possible to outperform last year’s record large yield of 171 bu/acre. To do that, not only do the good states have to become great, but the poor states (Illinois, Missouri, Indiana, Ohio) have to improve to near average in order for the nation to have a chance to hit another record large yield. But not the Pro Ag yield model only needs to improve another 3 bu/acre to set a new record large yield, and two more weeks of improvement like the last 3 weeks and we will be there!
Soybean crop conditions were also unchanged at 62% rated G/E, with the yield model showing little change at 45.1 bu/acre (actually a very slight decline). This in spite of expectations of a crop condition improvement by the trade. Apparently, the soybeans are taking a longer time to ‘grow out’ of the wet funk they were in for the states of Missouri, Illinois, Indiana, and Ohio where conditions are still poorly rated. Crop development, however, is moving back to near average with the recent warm weather, with corn silking at 55% vs. 56% normally and soybeans blooming at 56% (equal to average) and pod setting at 17% (also equal to average).
Other crops are also showing about steady development/ratings, with cotton 57% rated G/E (equal to last week but well above last year’s 52% rating). Sorghum conditions are 67% rated G/E, also equal to last week but above last year’s 62% rating. Winter wheat harvest has advanced to 75% complete, now ahead of the normal 74% as the harvest has gone nearly unstopped by rains recently due to the drier, warmer weather in the western U.S. Oats is 16% harvested vs. 23% normally, with conditions rated 67% G/E (down 1% from last week) but vs. 64% last year.
Spring wheat is 96% headed vs. 83% normally as the early planting continues to show up in progress reports, with conditions 70% G/E, down 1% from last week and equal to last year’s 70% rating. Barley conditions are 71% rated G/E, down 1% from last week but well above last year’s rating of 66% G/E. Overall, the spring planted small grains are in very good shape, and a record large yield of these early planted crops is possible as the crop looks pretty good at this time of year with harvest just around the corner. The soil profile is full with moisture, too, so it’s unlikely that it will deteriorate quickly in the last few weeks before harvest. Pasture and range conditions are 63% rated G/E, down 2% this week but still highly rated vs. last year’s 53% rating and showing that pastures and rangeland are still in great shape due to spring and early summer rains. The soil profile is still pretty full, as topsoil moisture is rated 78% adequate/surplus nationally, down only 2% from last week and well above last year’s 62% rating. Subsoil is 81% rated adequate/surplus, down 3% from last week but still well above last year’s 62% rating. It looks like drought will not be a concern in 2015 as crops are already into the end of July, and the soil profile is still full of moisture in almost all states. That bodes well for crop conditions for the next few weeks, even if (or especially if) the warmer, drier forecast proves correct for the next 7 days. Thereafter, temps are supposed to cool somewhat so that leaves corn pollination and soybean bloom in some very good late summer conditions.
Pro Ag feels that markets have likely topped for the summer (and perhaps the year), and if corn and soybean crops continue to improve over the summer, it’s likely we will have another above average crop (and perhaps a record large crop in corn). If you didn’t make sales aggressively last week when we recommended many of them, it’s probably time to get something sold as prices could deteriorate fast as we end the summer and head into harvest of what looks like another good crop of corn and soybeans.