The market is bracing for a slight reduction in USDA’s corn yield estimate in Friday’s crop production report with disappointing yield reports already coming in from southern corn-producing states.
Arlan Suderman, senior market analyst at Water Street Solutions, says reports of poor yields from early harvests are pointing to a modest reduction of USDA’s yield estimate from the August estimate of 168.8 bu./acre.
“Yields thus far are coming in 10 to 30% below year ago levels, with some of the poorest corn yet to be harvested,” Suderman wrote Wednesday for the MarketSense blog. “Areas of the northwestern Midwest will see good yields; records in some cases. But yield estimates are coming down in the region due to a poor finish to the crop due to heat, dryness in some cases, but more commonly, anthracnose and other stalk diseases.”
Reuters’ survey of traders this week also indicated the trade expected a slight decrease in USDA’s corn yield estimate on Friday. The average survey guess came in at 167.7 bu./acre, down 1.1 bu./acre from USDA’s estimate last month. Reuters also reported a smaller average trade estimate on total crop size of 13.599 billion bushels, which compares to USDA’s August projection of 13.686 billion.
Chip Flory, editorial director for Pro Farmer and host of the radio program Market Rally, also notes that corn crop is not holding up to USDA’s projection on yield.
Of particular concern, Flory noted Wednesday, is nitrogen deficiency in eastern states where abundant spring rains stole nitrogen from farm fields. “The symptoms are there,” Flory said. “But when it really shows up, it really shows up late in the season and we’re seeing those issues now.”
September weather also is not giving the corn crop a strong finish, despite crop conditions that have held steady in USDA’s weekly crop progress report. As of Sept. 6, USDA rated the U.S. corn crop 68% good-to-excellent, unchanged from the week prior.
“September weather so far has not done much to add weight to the corn crop,” Flory said. “And that means the crop isn’t going to be as big as it could have been if the weather would have cooperated a little more – some cooler temps and another shot of early September rain to help build the ear weight.”
With so much of the crop yet to be harvested, big changes in USDA’s yield estimate will likely be held off for the October report when more data is gathered, Jerry Gidel, feed grain analyst at Rice Dairy, LLC, said on Wednesday’s airing of Market Rally.
Currently only southern regions of the U.S. are reporting crops ready to harvest. In USDA’s weekly crop progress report, crop maturity had advanced to 48% mature in Tennessee, 51% in Kentucky, and 43% in Illinois as of Sept. 6.
“Some corn is now being picked in the I-80 corridor, while activity is more prevalent further south,” Suderman reported Thursday. “Yields are sometimes good, but the continued theme has been ‘disappointing.’”