Fundamentally Speaking

USDA crop progress report this past week showed corn conditions improving 2% week-over-week to 59% for good to excellent (G&E). Trade estimates called for just a 1% improvement. Ratings for this time last year were 57%.

Soybean G&E conditions improved even more, up a sharp 5% week-over-week at 59%. Trade estimates called for a 1% increase and ratings were 58% a year ago.

The rise in corn and bean conditions for the second week in a row is unusual. Conditions usually decline this time of year with various stages of maturity setting in. This could signal a rise in yields from the 175.1 and 50.9 bushels per acre (bpa) for corn and beans respectively reported in last Friday's USDA projections.

We weigh the crop based on the percent in each category and assign that category a factor of 2 for very poor, 4 for poor, 6 for fair, 8 for good, and 10 for excellent and then sum the results. Using this system, this chart shows the change in U.S. corn crop ratings from the end of July to the end of August on the right-hand axis. It also shows the August to September and August to final yield changes for US corn in bpa plotted on the right-hand axis.

From 1986-2022, average corn yields in September are down 0.1 bpa vs. the August forecast. Final yields tend to average 0.6 bpa above the August estimate.

On average, crop ratings decline 17.6 points between the end of July and the end of August, with the average end of August rating 713.

There have only been five years since 1986 when corn ratings increased from week 30 (end of July) to week 35 (end of August). All those years the corn yield increased from the August to the September report.

We cannot say for sure, but believe if the end of August rating for this year's corn crop is higher than the end of July figure of 690, there is a good likelihood that the USDA will increase its yield estimate above the current 175.1 bpa. The July 690 rating was the lowest corn rating for that week since 2012.

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