You are here
Are the USDA’s 'Wild Yield Hikes’ Realistic?
It’s rare that USDA would raise soybean yields 6% or more in any one report, but they did just that for soybean yields in the August 10 USDA report. In fact, about half the time, USDA doesn’t need to change the final yield number more than 5% up or down the entire year. To put this in perspective, USDA did so in August with a rise that is larger than many whole years in the past. Last year, USDA got aggressive early in predicting large corn and soybean crops, only to back off the soybean numbers considerably by January’s final numbers. Could they be forced to do the same again this year?
The corn number was more believable with a hike in yield but a smaller percentage as well as a crop advanced enough to actually make those hikes. In other words, it was reasonable to hike the corn numbers, albeit a bit early. So the corn numbers are more in line with the Pro Ag yield estimate as well as many private estimates, but the soybeans blew everyone’s estimates out of the water!
Now that the government report is out of the way, we can return to more reasonably predictable things like weather (tongue in cheek). Weather seems to be difficult for weather prognosticators to predict, too, as there has been a fairly erratic long-term forecast recently. It has gone from hot/dry, to cold/wet, and now fluctuating back and forth between the two extremes. It has been a bit dry in some Corn Belt areas, resulting in crop stress and most stress on soybeans rather than corn. The recent hot/dry weather in HRS wheat areas has been great harvesting weather, and that means harvest is going good so far.
Weather forecasts today call for warmer and wetter weather the next seven days, and thereafter warmer and drier for days eight through 14. The wet forecast the next seven days in the Corn Belt is surprising considering the dry period we’ve recently been in.
Crop Progress Report
The crop progress report on August 13 showed corn and soybean conditions dropping 1% in each category, with soybeans now rated 66% in good-to-excellent condition, and the Pro Ag yield model unchanged at 48.5 bushels per acre. That is now over 3 bushels per acre less than USDA’s ill-conceived 51.6-bushels-per-acre yield projected Friday in the August USDA report. Where they came up with that number this early is beyond us to explain! Pro Farmer’s tour coming up in the next few weeks won’t even put out a soybean yield estimate as they say it’s too early in the season. They simply count pods. So where did USDA come up with a 3.1-bushels-per-acre hike in the August report to a new record yield? Exasperating to say the least!
Corn conditions dropped 1% to 70% rated good-to-excellent condition, with the Pro Ag yield model down 0.25 bushel per acre to 177 bushels. USDA is at 178+, but at least they are closer on the corn number for now. And corn is more developed than soybeans, so yields might be accurately rated to a point. Corn is 73% dough stage (17% ahead of normal), and 26% dented (13% ahead).
Soybeans are 96% blooming (4% ahead) and 84% setting pods (12% ahead). Cotton is 96% squaring (2% behind) and 77% setting bolls (1% behind) with 13% bolls opening (4% ahead). Ratings are still 40% at good-to-excellent condition, the same as last week and well below last year’s 61% good-to-excellent rating. Sorghum is 78% headed (5% ahead), 37% coloring (1% ahead), and 21% mature (3% behind). Conditions are steady in sorghum at 49% rated good-to-excellent, also well behind last year’s 64% rating.
Winter wheat is 94% harvested (2% behind), with oats harvest 67% (3% behind), and HRS wheat surging forward to 35% harvested (8% ahead of normal). HRS wheat conditions rose 1% to 75% rated good-to-excellent, with barley conditions up 2% to 81% rated good-to-excellent. Barley harvest is 3% ahead of normal at 41% complete.
Soil moisture levels nationally depleted 1% topsoil to 57% (now below last year’s 60% adequate/surplus rating), while subsoil dropped 1% to 57% adequate/surplus. But there isn’t much left of this production year, as by early September most crops will be winding down and getting ready for harvest.
It’s amazing how poorly this year started, and how good it is ending up. We will likely have an above-average corn and soybean crop, but perhaps not as good as USDA is currently projecting with their wild yield hikes last week.
Ray Grabanski can be reached at firstname.lastname@example.org.
Ray Grabanski is President of Progressive Ag Marketing, Inc., the top-ranked marketing firm in the country the past eight years.
This material has been prepared by a sales or trading employee or agent of Progressive Ag Marketing, Inc. and is, or is in the nature of, a solicitation. This material is not a research report prepared by Progressive Ag Marketing's Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.
DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITED OR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITHOUT REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION.
The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that Progressive Ag Marketing believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that advice we give will result in profitable trades.