Record-large crops ahead for middle part of Corn Belt, analyst says
So far, we have mostly dry August weather as we start the last month of summer.
It’s been mostly dry across almost the entire Corn Belt, but the parched northwest portion seems to be suffering the most from the drought. Yet, Monday’s USDA crop progress report showed an improvement in soybean conditions, while corn and sorghum dropped significantly.
The surprising 2% improvement in soybean conditions Monday to 60% rated good/excellent caused grains to push lower in overnight and day trade in spite of a 2% decline in corn conditions (to 62% G/E).
Pro Ag yield models predictably rose for soybeans 0.25 bu/acre to 49.4 bu, still below 49.8 trend yields and 50.8 USDA current projection. Corn yield dropped 0.4 bu/acre to 177.5 bu vs. 177 trend and 179.5 USDA.
How soybean conditions rose (vs. a 1% to 2% decline expected) when the Corn Belt received very little rain last week is a head-scratcher. State by state G/E conditions rose 3% in Illinois, 4% Indiana, 4% South Dakota (who had some rain in about half the state), 6% Ohio, and 1% in Kentucky, Tennessee, North Carolina, and Louisiana.
The only states that received rain of those listed was South Dakota, and that was about half the state with 0.25 inch or more. That means the other states had to be too wet so that dry weather was actually favorable last week. Really? Can it be true that during soybean podding, no rain is favorable? A real head-scratcher.
But it is what it is. Poor/very poor ratings rose in Iowa (1%), Minnesota (3%), North Dakota (4%), South Dakota (4%), Nebraska (1%), Kansas (2%), and Wisconsin (1%) so these were the states that suffered the most. Note South Dakota is in both categories – those that rose in G/E and those that rose in P/VP, meaning where it didn’t rain, the disaster worsened and where it rained, it improved.
Soil moisture levels, nationally, declined fast, with topsoil and subsoil both down 4% in adequate/surplus. So, soils are getting even drier going into August. Is there enough stored soil moisture to get us through 2021? How much can it rain this month to supplement the soil moisture?
We note that HRS wheat conditions rose 1% from last week to 10% rated G/E. Is that because harvest yields are better than expected on the heavier soils? Many times heavy soils yield good during droughts as there is no drownout/excess water during the summer, and also no disease.
So some eastern, Red River Valley yields on heavy soils are 80 bu/acre or more. But barley conditions declined 1% last week, making the two seem a bit inconsistent.
Weather continues to call for warm/dry weather the next week in the northwestern half of the Corn Belt, and dry and moderate temps in the southeastern half. Like usual during droughts, it is vacillating between a warm/dry forecast in the eight- to 14-day forecast, and occasionally (like this morning) puts rain back into the southeastern Corn Belt. Recently, though, there has been little rain in the southeast as well as the Corn Belt. So, the weatherman continues to tease both the bulls and the bears.
USDA will be out with its August USDA report next week, and will probably have to cut both corn and soybean yield projections from trend numbers, at least at some point this fall. These will be the first survey/plot based yield estimates of the year, so they may be able to home in on just what type of crop we have in the United States. The southern third of the U.S. is likely to have a record-large crop coming since it’s been cool and wet across this area most of the summer.
The middle third of the U.S. Corn Belt will also have a very good crop, probably well above trend yields in corn and soybeans. It might even be record large in some states, but in others it might be close. The northwest Corn Belt, however, might be a disaster, with yields well below average. North Dakota will likely be the worst drought-impacted state, followed by Minnesota and South Dakota. Rain now would be immensely helpful to the soybean crop, but is too late to help HRS wheat, and possibly even corn.
So we’ll see just how we finish off the 2021 crop. Rain makes grain this time of year, but quite honestly, there hasn’t been much rain at all in the tri-state area.
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Ray is President of Progressive Ag Marketing, Inc., a top Ranked marketing firm in the country. See http://www.progressiveag.com for rankings and link to data from Top Producer Magazine and Agweb.com.
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