Will Large Planted Acres Translate Into Record Yields???
Jun 18, 2012
The debate continues to press on and I continue to argue that the current 166 corn yield estimate by the USDA is overstated. I have two main arguments. First and foremost is the number of acres planted. Remember in 2009 and 2004, our two crops with a 160 plus yield, we had a lot fewer corn acres in the ground. My guess is the additional acres being planted, or should I say the most ever planted in the past 75 years, will not be going on the most optimal corn ground. If the ground was conducive for extremely high yielding corn I would have thought the near $8.00 per bushel price tag back in 2008 would have prompted the acres to be planted at that time. The other obvious issue is the extremely warm and dry conditions we have been experiencing here in the US the past several months. You have to believe if the trend continues we may be looking at one of our warmest summers as well. There has been some data circulating throughout the trade the past couple of days that backs up this thought. Do you realize we have only once followed up a warm winter with a record corn crop. That happened in 1992 and many analyst attribute the phenomena to the abnormally cool summer, thought to be caused by the Eruption of Mount Pinatubo. Not one of the other ten-warmest winters ever produced a record corn yield the following season. The point is the USDA is forecasting something that generally doesn't happen. I wish I could personally give you more accurate estimates in regards to the crop, but unfortunately I can not. My guess is the USDA number is too high, so then what is the best number to use? Is it the lower 164bpa trend line yield or is that still too high considering the current conditions. Right now I am thinking a US corn yield number between 158 and 162 bushel per acre is a fair assessment if you take into account all of the current variables. My reason for not pushing the number lower is because we have been experiencing some fairly cool nighttime temps, put more limited stress on the crop. If the nighttime temps start to heat up, I will be inclined to further drop my estimates. In the USDA's defense they do admit to a large variable or variation being possible in their early estimates. I have heard many in the trade say the early numbers can have a 14 bushel variance in either direction. Because of the large discrepancy I have heard many trader actually argue for the USDA to use a range type estimate early on in the year, then start narrowing the range down as they start to get more puzzle pieces in place and see a much clearer picture. I don't think any one would have argued if the USDA would have said early on they believe the US corn crop could yield between 155 and 170 bushels per acre. From there start to move the scale and narrow down the range accordingly.
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