With two days of the 4-day ProFarmer crop tour in the books, estimates of soybean and corn yields from field level are looking fairly bullish, but markets, seemingly, aren’t buying it yet.
“When you stop comparing what is right here and now with what you wish were, you can begin to enjoy what is.” – Cheri Huber (American author)
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Aug. 21 – Bullish Soybean, Corn Yields (At Least Compared to USDA)
With two days of the four-day ProFarmer crop tour in the books, estimates of soybean and corn yields from field level are looking at lot more bullish than the USDA’s numbers in the August WASDE. Grain markets are necessarily accounting for some of the bullish photos and yield estimates just yet but they are all in the green this morning. That said, the crop isn’t in the bin yet and so, in my opinion, speculators aren’t too hyped up on getting too speculative without more concrete evidence that soybean and corn yields won’t be that great.
From my read-through of #PFTour19 social media posts, there are two main takeaways that I’m seeing. First, in many places, plant populations are down from last year as farmers scrambled to get the crop planted. Second, since many of these crops were planted late, their development is quite behind that of years past, which makes them very prone to quality AND quantity issues should there be close-to-average frost dates. Thus, analysts are saying a long, frost-free fall will be needed to help get the crop get through maturity.  On that note, the USDA’s crop progress report from Monday afternoon suggest that indeed, crops continue to be behind in their development. 
Corn Yields At Least 5-10% Worse Than 2018
For the past two days, over 100 scouts have traveled through South Dakota and Nebraska in the west and Ohio and Indiana in the east. For the South Dakota leg, average estimated corn yields came in a little over 154 bushels per acre, which would be 13% below last year’s tour estimate but only 2.5% below the five-year average.  Keep in mind that the USDA is currently forecasting average corn yields in South Dakota to come in at 157 bushels per acre and final corn yields last year in the Mount Rushmore state was 160 bpa. Keep in mind that the USDA is saying that 52% of South Dakota corn fields are rated G/E, down 13 points from the same week a year ago.
In Nebraska, crops are looking better than a lot of other places. Average corn yields there have been estimated by the crop tour scouts at 172.6 bpa.  This would be a 3.7% reduction from last year’s tour average for the Cornhusker state of 179.2 bpa, but 3% better than the three-year average of 167.73 bpa. For perspective, the USDA is currently expecting average corn yields in Nebraska to come in at 186 bpa, down 6 bpa from last year’s 192 bpa. Right now, a whopping 74% of corn in Nebraska is considered to be in G/E condition, but that’s down 10 points from the 84% G/E rating it had a year ago.
Compared to the west, the eastern side of the tour isn’t as good-looking. Ohio corn yields were estimated also just above 154 bushels per acre. If realized that would be down 14% from last year’s tour estimate and 6% below the three-year average. The USDA is currently forecasting 160 bpa corn yields for the Buckeye state, a 14.5% reduction from last year’s monster 187 average. Just 32% of the corn in Ohio is ranked in G/E condition, an incredible 45-point drop from the 77% G/E rating it had at this time a year ago.
In Indiana, the crop tour scouts are suggesting average corn yields of 161.5 bpa, which would be down more than 11% from last year’s crop tour’s estimate of 182.33 and 8% below the average of the past three years. That said, the USDA pegged last year’s corn yields in the Hoosier state at 189 bpa, but this year’s crop they’re calling for corn yields for fall an astounding 23 bpa to 166, or a little more than 2%. For context though, just 32% of Indiana’s corn fields are considered to be in G/E condition, down nearly 40% points from last year’s G/E rating at this time of 71%.
Should Soybean Pod Counts Count?
As mentioned a few times in today’s FarmLead Breakfast Brief, and multiple times by ProFarmer crop tour scouts, the U.S. corn and soybean crops are relatively immature. This is especially true for soybean crops as pod counts during the tour are well below what they’ve been in years past. Considering that the American soybean crop is about 1-2 weeks behind in crop development in most of the areas covered by the crop tour, should we take these numbers with a grain of salt? My gut says that grain traders are and that’s why you haven’t really seen soybean prices climb this past week (except for maybe this morning’s move to the upside).
Like corn yields, soybeans are looking much better in the west than the east, but the crop still has a long wayt to go. In South Dakota, with an average of just under 833 pods counted in a 3’x3’ plot on this year’s ProFarmer crop tour, this is nearly 19% below last year’s count and nearly 14% below the three-year average. Similarly, in Nebraska, average bean counts this year came in at nearly 1211, down about 7% from 2018’s crop tour, but pretty much the same as the three-year average. 
Comparably, in Ohio, average pod counts in an average 3’x3’ soybean plot was just 764. That’s a drop of nearly 40% year-over-year and 33% below the average found on the last three crop tours! Next door in Indiana, average pod counts came in at 924. That’s down nearly 30% from the same tour last year and 24% below the three-year average. The question on many minds are, is there enough time left in the growing season for crops to reach maturity? 
Ultimately, maybe we should take some of these pod count numbers with a grain of salt, just given how far behind things are. After all, just 54% of Ohio soybean fields and 50% of Indiana’s are setting pods right now, well behind their five-year average of 84% and 87%, respectively. We’ll get the final numbers from ProFarmer on Thursday night (which means I’ll share them in Friday’s FarmLead Breakfast Brief) but grain markets, right now at least, seem to be more interested in the USDA data, than ProFarmer’s.
At 7:35 AM CST in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3291 CAD, $1 CAD = $0.75324USD)
Dec Corn: +1.3¢ (+0.35%) to $3.70 USD or $4.918 CAD
Nov Soybeans: +5¢ (+0.6%) to $8.733 USD or $11.606 CAD
Oct Soybean Meal (per short ton): +$1.30 (+0.45%) to $297.20 USD or $395 CAD
Oct Soybean Oil (cents per lbs): +0.29¢ (+1%) to 28.83¢ USD or 38.32¢ CAD
Dec Oats: -1.5¢ (-0.55%) to $2.705 USD or $3.595 CAD
Dec Wheat (Chicago): -3.5¢ (-0.75%) to $4.63 USD or $6.154 CAD
Dec Wheat (Kansas City): -2.8¢ (-0.7%) to $3.993 USD or $5.306 CAD
Dec Wheat (Minneapolis): -0.8¢ (-0.15%) to $5.153 USD or $6.848 CAD
Nov Canola: +2.3¢ (+0.2%) to $10.26/bu / $452.40/MT CAD or $7.72/bu / $340.39/MT USD
COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECIPIENTS OF THIS POST. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.