Home / News / Crops news / USDA preview: 'Unprecedented'

USDA preview: 'Unprecedented'

Jeff Caldwell 07/10/2012 @ 3:22pm Multimedia Editor for Agriculture.com and Successful Farming magazine.

Besides the drought year of 1988, it's the driest year since the Dust Bowl. Soil moisture levels are the lowest they've been in more than a century.

These are the kinds of numbers that very well could be the basis for a Crop Production report from USDA on Wednesday morning that shows corn and soybean crop deteriorations the likes of which many traders have never seen. And, with already tight supplies for grain around the world, it could keep corn and soybean prices lingering in the stratosphere for quite some time.

"I really don't know how high is high. These are the tightest supplies that I've seen in my 32-year career," says Dan Basse, president of AgResource Company in Chicago. "You can envision $8 to $9 corn prices and $17 to $19 soybeans. This seemed unprecedented a few years ago."

Those numbers are based on yield projections ahead of Wednesday's USDA reports that range between 114 and 144 bushels/acre for corn and 36 to 39 bushels/acre for soybeans. There's a lot of room in the corn yield range window, and much of that is based on the departure from trend yield, says Terry Roggensack, founding principal of the Hightower Report. In a study of more than 4 decades, Roggensack says only 6 years saw a downward adjustment greater than 10% from trend yield. And, right now, the way 2012 is shaping up, he says there's reason to believe the corn yield could fall anywhere on the spectrum.

"In 6 of those 41 years we looked at, if we convert the old yields back up to where they'd be now as a percentage below trend yields, corn yields would come in between 114 to 140.6 bushels/acre," Roggensack says. "If we get anything below a 140-bushel yield, which is only down 10% from 10-year trend, we have a real problem on our hands."

Another hugely critical number right now, Roggensack says, is the number of corn acres in USDA's "very poor" condition category. Monday's report showed 12% of the nation's crop with that rating, or 11 million acres. The higher this number gets, the greater the effect on this year's U.S. crop size.

"In traditional times, we look at the very poor rating as very close to being plowed under. Twelve percent of crop is 11 million acres on verge of being plowed under," he says.

CancelPost Comment

Grain Stocks, Acreage Reports Send Corn… By: 03/31/2015 @ 11:06am Farmers in the U.S. will plant 89.2 million acres of corn this spring, down 2% from last year…

3 Things to Watch This Morning, Tuesday… By: 03/31/2015 @ 6:20am It's USDA report day!Corn futures are unchanged, and soybeans and wheat are trading lower in…

3 Things to Watch This Morning, Monday… By: 03/30/2015 @ 6:33am Today is the calm before the storm in the grains Monday.Tomorrow is the biggest USDA report day of…

This container should display a .swf file. If not, you may need to upgrade your Flash player.
Planter tips: Seeds