Clements: Crop condition ratings for corn and soybeans are below year-ago levels, as recorded in the USDA’s latest crop conditions report this week. American Farm Bureau Federation market intelligence director John Newton says this year has been a challenge for growers, with excessive moisture and planting delays this spring, and drought conditions in parts of the upper Midwest.
Newton: I don’t think many in the trade are anticipating another record corn or soybean crop this year. USDA has yields at this point in time at 48 bushels per acre on beans, and 170.7 bushels per acre on corn, and I think the market’s looking to the crop production report next week to get an updated expectation on what these yields just might be.
Clements: Newton says the upcoming crop production report next week could provide better market direction heading into harvest season.
Newton: At this point, I’ve told a lot of people to have a marketing plan in place and watch the yields that come out next week and make informed marketing decision. I think if we see yields come down, we may even see estimates of harvested acreage start to come down. The corn supply could be a lot smaller than folks anticipate, and that could help to pull down some ending stocks. And that’d be very bullish for prices.
Clements: Newton says more data is available regarding yield expectations on the Farm Bureau Market Intel webpage.
Newton: We did an analysis looking at the probability of maybe seeing corn yields this year moving back towards trend. The long-term linear trend’s 166.8 bushels per acre and we certainly think that’s a better probability of happening relative to the USDA’s 170.7. So, we look at the implications of seeing a corn yield at or below trend and what they may mean on the supply in 2017.
Clements: That information can be found at fb.org/marketintel. Micheal Clements, Washington.