Content ID

316686

Record-large crops ahead for middle part of Corn Belt, analyst says

North Dakota will likely be the worst drought-impacted state.

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.  

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
Reference our 10 minute weekly seminar every Saturday morning at www.progressiveag.com/videos, and click on the most recent recording.  
You might be surprised how much you can learn about markets in such a short period of time!!!    

Ray can be reached at raygrabanski@progressiveag.com.  
+++++++++++++++++++++++++++++++++++++++++++++++++++
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. 

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.

Read more about
Loading...

Talk in Marketing