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Current Marketing Thoughts

RSS By: Kevin Van Trump, AgWeb.com

Kevin Van Trump has over 20 years of experience in the grain and livestock industry.

My Current Thoughts About US Corn Yields

Jun 27, 2011

One of our southern Kansas clients told me this weekend the corn in his area just isn't tasseling.  Only six inches of rain in past nine months and one hundred degree temps forecasted for this week has them extremely worried.  Many in this area are now saying their corn is essentially "done."  Several producers in Nebraska reporting that they have had to replant more acres than they have at any point in the past several years, and are extremely worried about overall yields.  Some fields are looking great, some fields are looking terrible.  I had one client from North Dakota call and ask me if I knew of any "midgets" or "little people" that did crop tours, so he could have them out to his fields...he  wants to be able to tell folks that he has knee high corn...lol!  In all seriousness several North Dakota producers seem extremely worried about over all corn and spring wheat yields.  Several reporting they have never seen so much yellowing and uneven growth in the field.  Remember, many were forced to "mud" in the crop and the outcome is very sketchy at best.  Several were also forced to go with much shorter varieties at a significant reduction in yield.  Indiana, Ohio and many of those out east are projecting very questionable outcomes.  The crops in the South, as well as those in the Delta areas are also reporting some serious stress.  I don't want you to think for a second that it is terrible across the board, because it isn't.  In fact, I know of many producers in Iowa, Illinois, Missouri, etc...that are telling me they have fantastic looking corn. A few actually saying it could be some of the best corn they have ever seen.  The point I am trying to make is that the crop conditions are extremely diverse this year from region to region, state to state, and even county to county.  With this being the case, I am starting to become more and more concerned about whether or not we will actually be able to meet the current projected USDA yield.  It just seems like in the years we actually achieved this type of national average we ended up with what seemed to be "average" to "excellent" results across the board.  This year we have the "average" results, and we have some reporting "excellent" results, but I am worried because I seem to be hearing more "poor" to "very poor" comments than I normally would hear in a high production year.  Up to this point, I have felt the USDA has done a fine job with the data they have had to work with, and their current yield projection seemed to be very fair.  I am thinking things are starting to change a little.  As of right now there has only been a couple of producers call into the office to adjust their estimated number of bushels higher.  While there have been a countless number calling in to adjust their numbers lower.  Early on many were calling in to adjust the number of planted acres lower, simply because they couldn't get the crop in the ground.  Recently, producers have been calling in and actually adjusting their "yields" to the downside.  Rather than being optimistic about yields to the high-side, many producers seem as if they are just hoping they will be able to achieve their 5-year average.  Certainly things can and will change during the next several weeks as we are quickly approaching the critical stages of growth.  Weather is obviously going to dictate the overall end results, and will ultimately hold the answers to all of our yield questions.  As of right now however, I am starting to move into the camp that is projecting "LOWER" overall yields.  It is still early in many parts, I know, but you have to be concerned about the conditions being so extreme all across the country.  My thoughts are if the USDA were to raise the yield in Thursday's report, it might provide us with a longer-term buying opportunity.  You certainly have to believe if the USDA raises yields, the market will set-back dramatically.  I am thinking down the road the USDA will want to take that shot back, and will be forced to make a correction.  I am not going to throw out any yield numbers just yet, as I would simply be arbitrarily guessing.  I will go on record however as saying a 160 bushel per acre yield or higher by season end seems to be almost completely out of the question at this point in the game.  In fact, any type of bump higher in yield by the USDA from their current level in this Thursday's report would seem to me to be a move in the "wrong" direction.  It is however possible that the USDA could make the move based on current condition ratings, and therefore can not be ruled out entirely. 

 

*Remember folks, next Thursday we have the USDA Planted Acres Report coming out.  It is shaping up to be one of the most important reports of the year.  To know my thoughts on what Managed Money and the Funds will be watching for and how it will impact prices, make sure you sign up for my FREE report a couple days ahead of time so that you can catch the lead up to the big report!

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