Fundamentally Speaking

Surprisingly, even in a week with stressful growing conditions in much of the Corn Belt last week, USDA kept corn crop ratings the same at 69% good or excellent vs. expectations of a 1-2% decline.

This compares to the 57% year ago rating and 67% for the five-year average.

59% of the crop has silked, up 30% from last week.

This year's U.S corn crop rating as of week 29 (the third week in July) using our usual ratings system where we weight 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 is 752.

This is above the five-year average of 742, the ten-year average of 722 and the 20-year average of 725.

This graphic shows a scatterplot of week 29 corn ratings vs. the percent the final corn yield deviated from the 30-year trend.

As seen in the chart, the R squared is 77% meaning that 77% of the yield variability is explained by week 29 crop conditions.

Plugging the 752 yield into the formula results in a calculated yield 2.9% above the calculated 30-year trend (which this year we put at 176.0 bushels per acre bpa) and results in a yield of 181.1 bpa.

Over the past three weeks we feel the corn market has been trading a yield in range from 176-180 bpa but recent improvements in weather has probably pushed that to 178-182 with USDA currently at 178.5 bpa.

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