The corn market (along with other CME contracts) have given back a lot of their risk premium, notwithstanding the fact that the latest national corn condition ratings fell by three points this week to 65% good/ excellent, down from 72% last year and the 69% five-year average, the trade feels that improving weather prospects will stabilize and likely improve crop ratings over the next two weeks.
Still with the NW Cornbelt and Northern Plains growing areas seeing severe stress it may be a reach to attain the USDA's 2021 corn yield forecast of 179.5 bushels per acre (bpa), 2.9 bpa above the old record.
The current high prices are not only due to tremendous Chinese demand but crop shortfalls in a number of key producing regions including the U.S., Black Sea region and South America last year.
This is reflected in the accompanying graphic that shows the percent that U.S., foreign and world corn yields deviate from 1990-2020 trend on the left-hand axis vs. the U.S. corn yield as percent of world and foreign corn yields on the right-hand axis.
We were also curious about how U.S. corn yields have fared relative to global and foreign yields over the years, so we added trendlines for those data series.
The U.S. corn yield last year at 172.0 bpa though above the prior year's 167.5 was still 1.7% below trend and was one of the reasons why the world 2020/21 corn yield came in at 2.6% below trend, the second largest negative deviation from trend since the 2003/04 season other than the disastrous 2012/13 season.
Foreign corn yields last year were 1.8% below trend, the third worst performance in that regard since the 2007/08 season.
Note these figures incorporate the latest USDA corn production figure for Brazil at 8.5 million metric tons yet many feel output this year will be no larger than 90 million tonnes and if that were the case last year's world corn yield would be over 3.0% below trend showing how other country's production woes has contributed to this high priced environment.
We also note that while U.S. corn yields continue to exceed foreign corn yields, the percent that they do has trended down over the years from around 270% greater to now closer to 230%.
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