If you were taken aback Wednesday by USDA’s decision to raise yield estimates for corn to 168.8 bu. and soybeans to 46.9 bu., you’re in good company.
“If they just looked at the plant population and didn’t touch the corn cobs and didn’t look at anything else to see whether it’s going to make it or not, then I could see this,” said Jerry Gulke, president of the Gulke Group in Chicago, in a special report with Farm Journal Radio. “Based on plant count and cob count, it doesn’t look that bad, but boy, you start stripping stuff back in the Eastern Corn Belt,” and the assessment of the crop’s potential changes dramatically. “I’m even on the side of thinking, ‘Do they really know what they are doing or don’t they?’” he said. “Even in my own crop in Northern Illinois yesterday, we found some Northern leaf blight that really got us in the last two weeks. Wow--our yield dropped 25 bushels an acre at least.”
The higher forecast for soybean yield also surprised him.
“This is really a shocker,” he said. “At almost 47 bushels an acre, that is going to be an unbelievable yield considering what I’ve seen out there and the August weather.”
Gulke added: "If one considers that the good-to-excellent this year is 7% less than a year ago and a yield predicted at 45.4 bu back then, yet the yield in the August report is predicted higher than last year, one has to wonder about the methodology of their survey."
Corn and soybean prices plunged on the news.
“What we’ve done is taken prices back down to the June lows or below that we had when we had the stocks report, where we were up 50 cents in beans and 30 cents in corn,” Gulke said. “Today we touched limit down in corn and limit down in beans.”
Listen to Jerry Gulke's special report for Farm Journal Radio:
What can farmers do? Sit tight.
“For the 40% of corn being grown in the United States that was in ‘poor’ to ‘very poor’ (condition according to this week’s Crop Progress report) and (if) that turns out to be where we’re at in the final analysis in October, there’s nothing much you can do here other than just wait it out and hope for a rally after harvest,” Gulke said.
The situation reminds the experienced market watcher of other notable years, such as 1993, when the Mississippi River overflowed its banks and flooded millions of acres.
“I liken this back to what happened in 1993 as well as 2010,” Gulke said. “We got totally hammered on one of those reports, and then the next report showed reduction in yields because as we harvested acres in September, October, November, December, and finally January, we found that yields weren’t quite as good. I have to be on the side of the camp now that says we’ve probably seen the highest production numbers.”