Big crops are getting bigger, analyst says

One wonders how much lower corn prices can fall.

The old saying is that big crops get bigger. Right now we don’t have an exceptionally big crop coming of corn and soybeans, but it is above average – and growing each week.  

This week we have another slight improvement in corn of 0.5 bu/acre, and in soybeans of 0.12 bu/acre.  

These are small changes, but they are getting bigger, not smaller, as the year rolls on. It’s August now, with only soybeans having significant weather left to influence the crop in the development stage, and then harvest in the Corn Belt (with so much tiled ground) becomes an easier prospect. So, harvest losses are usually minimal.   

Weather forecasts the next 14 days have turned warmer and drier for the western U.S., and still remain cooler the next seven days in the eastern U.S., but then warms in the eight- to 14-day forecast back to above normal. The eastern U.S. also is forecast to have above-normal precip in the eight- to 14-day forecast, but very little precip in the next seven days in the Corn Belt.  

The East Coast is getting heavy rain from the hurricane that hit land last night in North Carolina, and is moving north mostly and eastward. It will hit most of the East Coast with heavy rain before it’s done.  

Overall, weather still is mostly favorable for crops, although there always is some area that’s too dry (Iowa plus northern Indiana and Ohio) and too wet (North Dakota). Harvest has begun for HRS wheat and barley, and overall those yields look to be fairly decent as well.  

Crop conditions out yesterday afternoon, 8/3, show a continued improvement in yield potential of corn and soybeans, and probably most other crops.  

Also, this week’s corn condition rating was unchanged at 72% G/E, with the yield model going up 0.5 bu/acre to 181.16 bu (above USDA’s current 178.5 estimate).  

Soybean conditions improved 1% to 73% G/E, and the yield model jumped 0.12 bu/acre to 50.63 bu, also above USDA’s 49.8 bu/acre estimate.  

It’s likely that the USDA will hike yields in the August report, as the crop is doing quite well in spite of below-normal precip in many areas, and well-above-normal temps most of the summer.  

Crop development is also ahead of normal in both soybeans (59% setting pods vs. 54% average) and corn (39% dough vs. 33% average).  

Cotton is about the only crop falling back, with a 4% drop in conditions to 45% G/E vs. 54% last year, so cotton will be below average this year, which is why cotton prices are going higher.  

Sorghum conditions improved 2% to 55% G/E, HRS +3% to 73% G/E, and barley +1% to 81% G/E; but all of these crops are behind normal development due to the late start in these areas. Winter wheat is 85% harvested (-3% from average) while HRS wheat is 5% harvested (5% behind normal), and barley 5% harvested (7% behind normal).  

For most spring-planted crops, though, the prognosis is for a decent crop, maybe even above average and in some areas, record-large yields are possible.  

Soil moisture levels are maintaining at 64% adequate/surplus topsoil (+1%), and 65% adequate/surplus subsoil (unchanged), which means we will probably get by this year despite warmer and drier-than-normal conditions in many locations – and still produce an above-average crop.

While rain makes grain and big crops get bigger, typically higher yields mean more depressed prices into harvest. But so far, the past few weeks have included improvements in weather for crop development, yet but prices are really not seeing any serious deterioration in soybeans yet.

Corn is right back down at the yearly lows. It makes one wonder, how much lower can it go?  


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Ray can be reached at raygrabanski@progressiveag.com.  
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Ray is President of Progressive Ag Marketing, Inc., a top Ranked marketing firm in the country.  

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