Will Lower Yield Projections Create a Bullish Story on Corn Prices?

August 23, 2017 07:39 AM

U.S. Farm Report Host Tyne Morgan talked with a frazzled-looking Pete Meyer of PIRA Energy Group last night about what he saw going through Indiana and Illinois fields yesterday during day two of the Farm Journal Midwest Crop Tour.

Her first question out of the box was whether Meyer was impressed or underwhelmed by what he saw in the heart of corn country.

“I’ve been through Illinois three times this year and it’s much worse than I would’ve thought,” Meyer says. “Areas where you typically see 225 bu. corn, we came out of there at only 175 to 180.”

In Indiana, Meyer echoes what many tour scouts have been saying the past two days. The crop is inconsistent, hugely so.

“Where it’s good it’s OK; where it’s bad, it’s really bad,” Meyer says.

The all-sample average on Indiana corn came in at 171.23 bu. per acre, down 1.3% from year-ago. Ear counts were down 2.6% from what scouts found last year, while grain length was up.

“Will the lower yield projections create a bullish story on corn prices?” Morgan asks.

“No, because there’s just too much corn. In order for us to get back to 15, 16 carry-out numbers in ’17 we’d have to lose a billion bushels in production. We’re not losing a billion bushels in production.

“Because if we lose a billion bushels in production, we’re going to lose a half billion bushels of demand,” Meyer explains. “That seems to be lost on a lot of people.

“Can we get down to 166-bu. crop? Sure. Will it make a difference? Probably not,” he adds.

Soybeans could be a similar story, but Meyer is reluctant to write off the crop at this point. Still, he had little encouraging to say.

“I’m very disappointed in pod counts. This time of year you usually still see some potential, but the pods aren’t sitting quite right. They’re a little too high on the plants,” Meyer notes.

The all-sample soybean pod count in Indiana came in at 1168.78, down 0.8% from last year. Soil moisture was down 6.7%.

From there, Meyer addressed the impact of lower soybean yields in the marketplace and what he hopes to see today as the Crop Tour pushes into Iowa. You can get his full analysis in the video.


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