Analysts Consider Corn Yield, Market Reaction

August 30, 2016 05:00 AM
corn nebraska crop tour 2016

After last week’s Pro Farmer Midwest Crop Tour, many growers and analysts are increasingly doubtful that USDA’s August estimate of a record national average corn yield will hold.

“Do you think that we have a 175.1 national average on our hands?” U.S. Farm Report host Tyne Morgan asked analyst Peter J. Meyer in Rochester, Minn.

“No, I do not,” replied Meyer, senior director of agricultural commodities at PIRA Energy Group in New York and a crop scout on the Pro Farmer crop tour’s Eastern leg. “I think the numbers are probably between 171 and 172 (bushels per acre).”

Based on crop tour data and other factors, Pro Farmer on Friday estimated an average yield of 170.2 bushels per acre.

That’s nearly 5 bushels below the USDA projection, but the market doesn’t appear to be reacting with higher prices. As of midday on Monday, September corn futures were down 3.5 cents to $3.12 ¾.

“The real question is will  (the lower yield estimates) make a difference in price?” Meyer asked. “I do not  think it will make a difference in price.”

Other crop scouts and market watchers agreed. “It’s not that (the trade) doesn’t care,” said Pro Farmer Editor Brian Grete, who led the tour’s eastern leg. “They just think they are really comfortable with that 171 to 172” bushels per acre yield estimate that the market expects to see this harvest, despite USDA’s high numbers.  

Given all these projections of a bumper, if not quite record crop, analysts and farmers are starting to wonder if the harvest lows might come early in 2016.

“Historically, with big crop years, you put in an early harvest low,” Grete said. “You realize the big crop ahead of time, you make that low, and as prices are dropping, you build that demand base, which encourages you to come out of that early seasonal low.”

Others aren’t quite so sure. “I do not (think we’ve seen a harvest low),” Meyer said. “I think it’s going to be a long drawn-out process here, and I think your banker is going to have something to say about this too, and that scares me to death.”

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Spell Check

Osterdock , IA
8/30/2016 07:40 AM

  You know if it's the governments test its for the buyers...China comes to mind...

Farmer 32
Grand Forks, ND
8/30/2016 10:23 AM

  If the market would of reacted differently last week and this week this guy would say I think the market will be effected by the pro farmer tour.

8/30/2016 06:53 AM

  Made numerous checks using two different formulas, the old standard using population x kernal rows x kernals long x .01116 and the formula listed on crop tour with ear length by tape measure. Used 7th, 14th, and 21st ears on two rows. The results were a staggering difference. The old standard formula was almost 20 bu/ac less than the crop tour formula. I would suggest if you are going to do yield checks, to do it both ways. Makes you wonder what market these yield checks are for, the buyers market or the sellers market!!!!!


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