Record Corn, Soybean Yields Expected
Weather remains favorable for most crops. This week's crop ratings show steady or improving conditions throughout most U.S. crops, and that means higher yield potential as measured by Pro Ag yield models.
Crop conditions yesterday were mostly steady to higher in the USDA Weekly Crop Progress Report. Corn's good/excellent rating was left unchanged from a week ago at 76%. The Pro Ag yield model rose again 1 bu/acre to 171 bu/acre, now well above trend of 159 bu/acre and also above USDA's 165.3 bu/acre estimate. The crop added another 90 mb of production potential last week on the bushel rise in the yield model. So, carryout continues to rise along with production estimates. That is bearish and likely to keep pushing corn lower as long as the yield model is stable or higher.
Soybean conditions improved 1% to 73% good/excellent, with the Pro AG yield model rising another 0.2 bu/acre to 45.8 bu/acre. That is now well above trend of 44.02 bu and well above USDA's estimate of 45.2 bu/acre. That will add another 16 mb of production this week, and our estimate is 48 mb larger than USDA's July estimate, meaning carryout is now at 450 mb! This is a bearish number, and as long as yield models continue to rise, prices are likely to drift lower. The rain in southern areas last week, especially in the Delta, is adding to soybean yield potential.
Other U.S. crops continue their high ratings, with cotton at 52% rated G/E, up from 44% last year but down 1% this week. Peanut conditions are up 2% this week to 71% rated G/E. Sorghum ratings retained their high numbers at 62% rated G/E, unchanged from last week and well above last year's 45% G/E rating. Rice is rated 69% G/E, down only 1% from last week. Oats are rated 64% G/E, unchanged from last week and up from 56% last year.
Winter wheat is 75% harvested (equal to average), while HRS wheat is rated 70% G/E, unchanged from last week and above last year's 68% rating. (Last year was an excellent yielding crop!) Barley conditions are 66% rated G/E, up 2% from last week and above last year's 65% G/E rating (again, last year was a high yielding crop). Even pasture conditions nationwide are highly rated at 53% G/E, up from 44% last year.
Overall, we have a very high rated 2014 U.S. crop in nearly all categories/crops.
Crop development is also moving along ahead or at average, with corn 56% silking vs. 55% on average, and soybeans 60% blooming vs. 56% normally. Soybeans are 19% setting pods vs. 17% average. Cotton is 38% setting bolls vs. 37% normally, with sorghum 42% headed vs. 34% normally. Oats are 95% headed vs. 97% normally, with 34% harvested vs. 24% normally. HRS wheat is 84% headed vs. 85% normally, with barley 92% headed vs. 86% normally headed.
Weather forecasts remain cool and wet for the central and eastern Corn Belt, but warm and relatively dry for most of the rest of the Corn Belt for the next seven days. That could stress some lighter soils in the far western Corn Belt that aren't irrigated. However, it is also perfect weather in the central and eastern Corn Belt, and this is allowing plants to
root down deeper in much of the Midwest; it also gives growing degree days in northern Corn Belt areas susceptible to freeze damage this fall.
The eight- to 14-day forecast looks to be mostly moderate (west) to cool (east) temps and goes back and forth between a wet and dry forecast. We'll have to see what verifies, but typically in late-July and early August, the wetter the forecast, the better the yield.
As we've said before, Pro Ag remains bearish as the crop (corn and soybeans as well as most other crops) is improving steadily in yield potential each week.
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