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U.S. Crops Are Showing Signs of Declining, Analyst Says

Crop-weather couldn’t be more critical.

The crop has officially started to decline after a relatively stress-free summer, so far, in 2018. 

Crops got a late start in planting this year, as March and April might have been near the coldest months in the winter! Then, the switch turned in May and temps warmed well above normal and rains stopped for the first three weeks of May. That allowed a planting window that essentially meant the entire U.S. crop was planted in three weeks and change. 

Then, rapid germination and early growth allowed crops to not just emerge well but also to catch up and pass the normal stage of progress so that we actually now have an early developing crop.  

The early summer was nearly ideal, with adequate rainfall and warmer-than-normal temps allowing rapid growth. But now, we are starting to see some stress in official numbers, and the forecasts are also starting to hint at a few problems.  

Weather forecasts, today, are a bit drier and warmer than yesterday, with the northern half of the Corn Belt now forecast to be dry the next seven days, with mostly above-normal temps, which will put some stress on crops.  

The southern half is still forecast to see above-normal precip and mostly below normal to normal temps. 

In the eight- to 14-day forecast, it turns a bit drier and warmer, with the western Corn Belt seeing below-normal precip and above-normal temps. The eastern Corn Belt is forecast to have normal to above-normal precip, but warmer temps as well (more near normal). 

So, this is a forecast that still has some stress in it for the western and northern Corn Belt. 

The past month, Iowa, Illinois, Indiana, Missouri, and Ohio have all been relatively dry to a certain extent, and that is now starting to stress crops as we head into the middle part of August. Today, there is a rain band from Kansas, Missouri, Illinois, Indiana, and Ohio that will greatly aid where it falls, but it is a rather narrow band of fast moving storms.    

Crop progress yesterday revealed a declining corn, and even faster declining soybean crop in crop ratings, with corn down 1% and soybeans 3% in the G/E rating. 

Corn is now 71% rated G/E, and the Pro Ag yield model declined 0.38 bushel per acre to 177.32 – the first significant decline in corn this summer. 

Soybean condition declined 3% to 67% G/E, with the Pro Ag yield model down a large 0.46 bushel per acre. That’s a large decline in just one week, as that would drop the crop size 40 mb from last week. It’s no wonder soybean prices are up 10¢ overnight, and if adverse weather continues (warm and dry) in the stressed areas of the Corn Belt, soybeans could strengthen more, with August being the month that makes or breaks the soybean crop. 

Podding is a critical time for the soybean yield. If moisture and sunshine are available in August, it’s amazing what a soybean plant can do.  

Absent any nutrient, and it’s amazing how a nice looking crop canopy can produce very little soybeans.  

Crop development is ahead of normal, with corn 12% dented (6% ahead of normal), 96% silking (4% ahead), and 57% dough stage (20% ahead). Soybeans are 92% blooming (6% ahead), and 75% setting pods (17% ahead). 

Cotton is 60% setting bolls (2% ahead), and 9% bolls opening (3% ahead), but cotton conditions dropped 3% to 43% rated G/E. Sorghum is 69% headed (7% ahead), and 31% coloring (equal to normal). Sorghum conditions dropped 3% to 49% rated G/E, well below last year’s 61% rating.  

Winter wheat is 90% harvested, 2% behind normal. HRS wheat is 13% harvested, 1% behind normal while conditions declined 4% to 74% rated G/E. Oats is 51% harvested, 2% ahead while conditions remained steady at 71% rated G/E. Barley is 16% harvested, 2% behind normal while conditions declined 1% to 79% rated G/E.  

Moisture levels declined rather rapidly this past week, with topsoil dropping 3% to 58% adequate/surplus, and subsoil down 3% to 58% adequate/surplus as well.  

Overall we had a great start to the 2018 crop, but variable weather and a lack of rainfall in some areas in later stages of July and into August are finally starting to stress this crop after using up some of the stored soil moisture.

 The crop still looks like an above-average HRS, corn, and soybean crop (and many others), but we could either trim it back to near average yields, or push it toward another record-large yield (maybe more likely in corn) with the right mix of temperature and rainfall.  

We also still have an interesting situation with trade, and China might be as stubborn a country as we could encounter. We export $130 billion of goods to them, and they sell us $505 billion of goods to us. You would think an intelligent salesperson would try to work out differences before losing a net $375 billion dollar customer. But not China!  They are defiant and vow to “retaliate in equal measure.” 

Someone needs to explain to them that $130 and $505 are not “equal measure.”  Maybe we should send a kindergartner to negotiate with them? It seems a 5-year-old understands numbers better!   

Ray Grabanski can be reached at raygrabanski@progressiveag.com.  
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Ray Grabanski is President of Progressive Ag Marketing, Inc., the top Ranked marketing firm in the country the past 8 years.

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