Will the USDA Repeat Itself on Corn Yields?
May 02, 2014
Corn traders continue to talk about the place of planting and just exactly how it will impact yields as well as total US production. Below are my thoughts:
Will The USDA Cut Yield Estimate Next Week? There is starting to be some question in regard to if the USDA will make a downward revision to their current 165.3 trend-line yield estimate for corn in next week's May 9th report? If you recall they surprised a lot of traders last year by making an early reduction in this very same report. Personally, I don't see it happening this time around. The USDA has made it well know that they generally like to see 80% of the crop planted by around the third week in May. Keep in mind however the planting progress and weather data used is primarily for eight key corn-producing states: Iowa, Illinois, Indiana, Ohio, Missouri, Minnesota, South Dakota, and Nebraska. Those eight states typically rank in the top 10 corn-producing states in the US and account for an average of 76 percent of US corn production. You don't see North Dakota, Wisconsin or Michigan in the mix. Last year I think it was just more obvious. Especially when you consider the following: CLICK HERE for my daily report.....
>>> A Look at the BIG-8 <<<
April 27-29th Planting Pace Past Three Years
IA - 2014 (15%) planted; 2013 (2%); 2012 (50%)
IL - 2014 (32%) planted; 2013 (1%); 2012 (79%)
NE - 2014 (20%) planted; 2013 (3%); 2012 (44%)
MN - 2014 (4%) planted; 2013 (0%); 2012 (48%)
IN - 2014 (8%) planted; 2013 (1%); 2012 (70%)
OH - 2014 (4%) planted; 2013 (2%); 2012 (57%)
SD - 2014 (11%) planted; 2013 (0%); 2012 (31%)
MO - 2014 (47%) planted; 2013 (15%); 2012 (75%)
Bottom-line, from what I hear, if 90%percent or more of the corn crop were to be planted by mid-May the USDA would in turn tend to raise their expected corn yield by approximately 2.89 bushels per acre. Similarly if only 70% percent of the corn crop is planted they would more than likely reduce their yield expectations by 2.89 bushels. With this being said and the evidence presented above, I expect the USDA to remain patient and let the month of May play out before cutting their current yield estimate. Maybe it happens in the June report, but only IF we are behind our traditional pace. CLICK HERE for my daily report....