Reduced Yield Potential for U.S. Corn, Soybeans

A few weeks back in our weekly grains report, we estimated corn yields to be 6-11% below trend (7-year) and soybean yields to be 5-9% below trend, and in addition, highlighted the significant reduced potential for the corn crop.

The weather over the last three weeks has done nothing to help, and the estimates now for corn are 11-13% below trend, and for beans to be 7-10% below trend. This is in line with what was originally discussed in our reports from early June.

After visiting midwestern fields last week, many fields are completely under water, and those which are not, are still saturated and early development has been stunted. I anticipate many fields not to even plant, and for those that do, it will be extremely challenging to make even marginal yields. Iowa and Missouri had even more significant rain events last week. I saw many fields with the ankle-high corn that I mentioned earlier; by the end of June, corn is usually waist to shoulder high.

While beans may need fewer days to maturity, it is now approaching the point where it is too late for growers to make a switch. Many are comparing this year’s crop potential to the disaster resulting from the 1993 flood event. See FAS maps below for negative crop conditions (through 2nd dekad June).

right click 'view' to enlarge image

Comments

[Hutch:]

Barley harvest looks to be on the light side too.
Hey; it's a good excuse to stock up on beer!

2008 Jul 02 01:51 PM

[John Pseudonym:]

What if the weather turns cold early in the fall or even late summer?

Corn needs all the time it can get and an early frost would be a disaster.

We've had a cold, super wet spring; what does history say about what comes in the fall of a spring like that?

2008 Jul 02 03:16 PM

[Michael Fer...:]

Our forecast right now is for a short growing season. Not necessarily early frost, but still cool enough late season temps to shut down plant physiology and limit yield potential. The pain felt in grains markets for the current US crop us not over yet.

2008 Jul 02 04:09 PM

[Tim Plaehn:]

What happened to "knee high by the 4th of July"? Corn is not waist high at the end of June. I grew up in Iowa and Minnesota.

2008 Jul 03 08:24 AM

[blink0404:]

as the market continues to go down, agriculture, which used to be a safe haven, now looks like it may be subject to a downward trend. Here's a pretty good podcast that discusses what to during this down market and what's going on with coal, steel, bulk shipping, and agriculture.

the main idea is that individual investors dont have to act like institutional investors and this market and may be better holding cash than trying to beat the market.
www.greenfaucet.com/sh...

2008 Jul 03 12:25 PM