Nine of the 18 states that produce 92% of the U.S. corn crop are projected to have record corn yields this year. While some states are showing an increase of only 1 bu. or 2 bu. over the state’s previous records—other states are showing corn yields jump by 6% or 7%.
As of its Sept. 12 Crop Production and World Agricultural Supply and Demand Estimates, USDA projects corn production to be 14.827 billion bushels, up 241 million bushels from last month. USDA pegs the national average yield forecast of 181.3 bu. per acre—the highest yield on record. In 2017 the national yield was 176.6 bu. per acre, and in 2016 the national yield was 174.6 bu. per acre.
“USDA hiked projected U.S. average corn yield to a record 181.3 bu. acre,” says Alan Brugler of Brugler Marketing & Management. “Increased use estimates swallowed up most of the extra production, leaving ending stocks at 1.774 billion bushels and still 228 million smaller than the year just ending. The mid-point of the average cash price forecast dropped 10 cents, however, to $3.50. That is just a dime above last year.”
The shocker of increased corn yields caused corn futures to sink 4.2% last week, the bulk of it on Wednesday, Brugler says. Read Brugler’s latest Market Watch blog post.
Illinois, Indiana, Iowa, Michigan, Nebraska, Ohio, South Dakota, Tennessee and Wisconsin are all projected to have record corn yields. Illinois corn earn the top spot, as yields are expected to reach 214 bu. per acre. Iowa is also expected to top the 200-bu. threshold—coming in at 206 bu. per acre.
“The yields we’re seeing this year are way above previous record yields,” says Todd Hubbs, University of Illinois ag economist. “While this has been a good crop year for corn, it didn’t seem to be one that would record these kind of record yields—way above trendline yield projections.”
Missouri and North Carolina show the largest year-over-year drops in expected corn yields. This year’s state yield in Missouri are projected to be 32 bu. under 2017. North Carolina farmers are expected to harvest a corn crop that average 20 bu. per acre lower than last year.
Overall, most of the major corn-growing states are seeing good growing conditions. At a projected 177 bu. per acre, Kentucky is flirting with its record 178 bu. per acre of 2017. Pennsylvania corn is also predicted to fall short by 1 bu. per acre. In 2018, the state is expected to average 160 bu. per acre, which is just off last year’s average of 160 bu. per acre. Minnesota is also near its record yield level. In 2018, the state is expected to average 191 bu. per acre. In 2017 the state’s average was 194 bu. per acre, and in 2016 the state averaged 193 bu. per acre.
Yield Impacts on Prices
Going forward, the market anticipates yield reports from the field as harvest commences and the October production forecast, wrote Hubbs in his weekly crop outlook, “Record Corn Yield Forecast Weakens Corn Prices."
“Corn prices will be dependent on consumption throughout the marketing year barring a reduction in production levels,” he says. “Corn use continues to show strength at the lower corn prices in place in the market. While there is potential for a higher corn yield as we move through harvest, the impact on corn prices may be minimal.”
On the other hand, any reduction in corn yields sets up the potential for a strong rally, Hubbs says.
For More: USDA Reports Add to Harvesttime Blues