The present 2009 corn crop is in very select company in many ways as the industry awaits USDA’s additional acreage data results due to be released within its August 12th crop production report. While the trade focuses on the likelihood of an acreage decrease in corn and a yield per acre increase resulting in larger end stocks, we must not lose sight of the lagging maturity for the 2009 corn crop.
Although the 2009 corn crop is unique with regards to the special acreage data collection and the fact the present good to excellent conditions as of 8-2-09 are 68% vs year earlier level of 66% and five year average of 61%, there is little to dispute the crop is in better than average health as it enters the down slope of the reproductive phase or more commonly referred to as the silking phase.
It is the percent silk where Allendale Inc’s research discovers just how unique this years corn crop is in relation to past years. As of Aug 2, 2009, this years corn percent silk registers 76%. Over the most recent fourteen years there are four other years when the percent silk is near the same level but it must be noted there is only one other year of the fourteen when the percent silk was under 80%. By comparison, the fourteen year average for the percent silk is 89%, a full thirteen percent higher than the present 76%. Allendale Inc looked at is there a connection between the percent silk and how the national yield per acre evolves via USDA crop production reports between the month of July to the January Annual? As you are able to view the graph
, of the four years which were close to this years percent silk, the January annual USDA report had two years, when the bushel per acre yield was higher than the July crop production report and two years when the January annual yield was less.
More specifically the 1995 Jan annual yield was 5.2% less than the July estimate and in 1997 the yield was 3.1% less. In 1996 the January annual report the yield per acre was 3.3% higher than the July and in 2008 the yield was 3.7% higher than the July. Allendale Inc will note the only other year which had less than 80% of silk was 1996 and yet the January annual yield was higher than July but of great importance is how both 2008 and 1996 had later than average first freezes.
Implementing the percent change in yield for each year utilizing USDA’s present July supply demand estimates would result in the following end stocks vs the present USDA estimate of 1.55 billion bushels, 2008’s 3.7% yield increase suggest 2.006 billion bushels, 1996’s 3.3% yield increase suggest 1.957 billion bushels, 1997’s 3.1% yield decline suggest 1.164 billion bushels and 1995’s 5.2% yield per acre decline suggest end stocks of 908 million bushels.
To summarize, Allendale Inc fully anticipates USDA’s month of August WASDE is likely to decrease 2009 corn acres and anticipates an upward revision in the yield and result in end stocks which are similar to old crop levels. However based on the lagging maturity of this years corn crop, Allendale Inc must forewarn unless the major Midwest is to experience a second consecutive “late fall” this years corn yield is anything from made.
What are your thoughts regarding these scenarios? Is the 2009 corn yield subject to a notable July vs January yield decline based on lagging maturity? Do you feel you have the appropriate amount of risk protection for your corn crop? We welcome your questions
Allendale Inc welcomes any questions you may have by calling 800-551-4626 or
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