(Agrimoney) – Hopes for US corn yields this year took a knock after heavy rains prompted a bigger-than-expected drop in the condition rating, with expectations for soybean productivity eroding too.
The US Department of Agriculture overnight, in a weekly crop report, cut by 3 points to 68% its rating of the proportion of domestic corn in “good” or “excellent” condition, reflecting Midwest inundations blamed for everything from preventing fieldwork to encouraging mosquito outbreaks .
The downgrade, which was 1 point larger than investors had expected, expanded the gap between the 2015 crop and last year’s, which was rated at 75% good or excellent in late June, and ended up showing a record yield of 171.0 bushels per acre.
Indeed, the shortfall raised questions that this year’s yield figure will even beat the 166.8 bushels per acre that the USDA is factoring in, and which had appeared conservative last month after rapid progress in corn sowings.
Yield question
At Global Commodity Analytics, Mike Zuzolo said that the downgrade “really calls into question the ability of the crop to reach above average [yields] at this point.
A yield of “160 bushels an acre could be now the top-end of the trade bias going forward”.
Futures International, noting that “standing water was reported across northern Indiana over the weekend and many crops were in poor conditions”, cut its forecast for the crop by 1.5 bushels per acre, albeit to 167.0 bushels per acre, in line with the current USDA estimate.
Ahead of the data, Jerry Gidel, chief feed grains analyst at Chicago broker Rice Dairy, said that expectations of a 170-bushel-per-acre corn crop, and 47 bushels-per-acre soybean crop, had been “tempered in a large way”.
Ideas of 165 bushels per acre for corn, and 45.5 bushels per acre for soybeans, now appeared more realistic, results which would remain “big numbers” by historical standards.
‘Sizeable declines’
Futures International also trimmed its estimate for the US soybean yield by 0.2 bushels per acre to 43.8 bushels per acre, taking it well below the current USDA estimate of 46.0 bushels per acre.
The broker flagged “sizeable declines” in the ratings of crops in Illinois, Indiana, Michigan and Ohio, which led a drop of 2 points to 63% in the national good or excellent rating.
A year ago, the figure was 72%.
Illinois – the second-ranked US corn producing state and biggest soybean grower – Indiana and Ohio emerged earlier this month as crop troublespots, thanks to frequent rains, with Michigan’s issues becoming more apparent in the latest week.
‘Mosquito activity, corn and soybeans drowned out…’
In Michigan, USDA scouts reported “continued wet and windy weather in the south”, which saw “heavy rains, damaging winds, and even isolated tornadoes”.
“Excess soil moisture was reportedly taking its toll on field crops,” the scouts said, flagging “reports of water holes in fields, increased mosquito activity, corn and soybeans drowned out, wheat with signs of scab and rust, dry beans requiring replanting, and hay moulding in fields”.
In Indiana, officials reported that “prolonged floods and ponding in fields prevented farmers from applying much needed nutrients to stressed and deteriorating crops, which continued to bring down crop conditions.
“Many farmers have been unable to apply nitrogen to corn, which continued to become pale and yellow from lack of nutrients.
“Lodging, yellowing, and snapped stalks has become more widespread as the storms continued bringing strong wind and hail,” while “many crops remained in standing water”.
‘Prevented planting’ acres
Meanwhile, in Ohio, “saturated soils and continued rains throughout the state have brought on numerous concerns for producers,” scouts said, noting that “standing water has led to disease, projected yield losses, and weed pressures.
“‘Prevented planting’ acres are being registered throughout the state. Yellowing of field crops continues.”
And in Illinois, “rain continues to plague northern and central Illinois, delaying the winter wheat harvest and hay cutting”.
