If you think it’s too early to talk about possibilities surrounding the national yield this year, you aren’t alone. The yield debate is already firing up on social media, stoking anger and an intense debate, but that’s not stopping traders. As corn crop conditions improve, and big yield numbers are being thrown around, it’s pressuring corn prices, with many farmers staring at cash corn with a $3 handle.
Rains moved across the Midwest over the weekend and early this week, aiding crop conditions. Those rains, combined with the fact the U.S. didn’t announce a trade deal with China yet, pressured prices even more. And as analysts explain, you can’t deny the U.S. corn crop could be a monster, even with the possibility of an increased number of prevent plant acres in the South.
“Your rain shower pairs with all the rest that are making the shades of drought lighter with each passing week,” says Mike North, president of producer division at Ever.Ag. “As conditions improve, talk of higher yields in the July WASDE are becoming more plausible when comparing current crop progress ratings to similar years in the past. Bigger yields make the possibility of a 2-billion-bushel ending stocks number more believable”
Crop Conditions Continue to Improve
Here’s a look at USDA’s crop condition ratings released Monday, which continued the trend of improving crop conditions. Nationally, corn is rated 74% in good to excellent condition, which is a one point increase in just a week. But the bigger story is the fact this is the third-highest rating for this week in the past 10 years.
The best conditions are highlighted in the dark green, which include:
- Colorado: 90% good to excellent
- Iowa: 86% good to excellent
- North Carolina: 78% good to excellent
- Pennsylvania: 78% good to excellent
It’s not perfect across all the “I” states. Southern Illinois and Indiana suffered a wet spring, with trouble getting the crop planted this year. And prior to this week, there were dry pockets in the northern part of Illinois, as well.
USDA says 68% of Illinois’ corn is rated good to excellent with 10% rated poor to very poor. In Indiana, the corn crop has a 63% good to excellent rating today, whereas 11% of the crop is in the poor to very poor category.
The U.S. Could Crush the National Yield Record
Still, when you look at the overall crop condition ratings, this chart by Ever.Ag shows ratings are historically high. And while USDA’s crop condition ratings don’t translate to a specific yield, with strong conditions, it’s possible the U.S. will not only see a national record corn yield this year, but crush the previous record.
“The chatter’s out there,” says Joe Vaclavik of Standard Grain. “You hear the talk of the potential for something in the mid 180s, even as high as 190 [bu. per acre yield]. We haven’t been above trend in U.S. corn yields since 2018. That was the last time we were above trend. But there was a string of years, 2014 through 2018, we were above trend by a few percentage points every single one of those years. If you end up 2% above trend this year, you’re close to 185 bu. per acre. If you ended up 5% above the trend, you’re at 190.”
Considering the U.S. national corn yield has never topped 180 bu. per acre, that would be a huge jump. However, Vaclavik says he doesn’t like throwing out those big yield numbers so early, as there are other factors that also matter to the market.
“The fact that we’ve got so many acres, the fact that maybe farmers reduced inputs, but the crop ratings alone in a vacuum would suggest that those sort of numbers are possible,” Vaclavik says. “I’m a little skeptical, but the statistics would say it’s a possibility.”
‘This is a Special Corn Crop’
AgResource Company founder and CEO Dan Basse agrees with Vaclavik. The national corn yield could be in the range of 185 bu. to 190 bu. per acre, especially if the weather forecasts continue to show favorable conditions.
“I hate to say it, but as we start to model out condition ratings and yield, yes,” Basse says. “We need to get into August before we get some solidarity in all of this, but today it looks good. The weather forecast for the next couple of weeks look favorable, cooler temperatures with enough rain. So this is a special corn crop.”
