Fundamentally Speaking

December corn has oscillated between $5.60 and $6.60 really since the end of June in part linked to ideas that the final 2022 corn yield will not stray that far from the August USDA estimate of 175.4 bushels per acre (bpa) but the latest crop condition report and results from the first day of the Pro-Farmer tour are casting doubt on that assumption.

Meanwhile despite lower soybean ratings this week, they are still ahead of year ago levels when national yield turned out to be 51.5 bpa, the second highest ever and perhaps lends credence to this year's USDA estimate of 51.9 bpa which would tie 2015 as the highest ever.

We have noted for a while better chance of bean yields to hold in than corn as weather the rest of this month into September very important.

This graphic is a scatterplot of week 33 or about the third week of August USDA crop conditions for the U.S. corn and soybean crops using data from 2000 to 2021 based on 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.

These are plotted vs. the percent that the final corn and soybean yield deviated from the 20-year trend with the blue triangles soybean data and the red circles corn data.

This year's week 33 corn rating of 684 is the lowest since 2012 and the fourth lowest of the past 30 years and using the formula that explains about 68% of the variability in corn yields based on week 33 ratings would project to a yield 4.2% below this year's 20-year trend of 176.7 bpa or 169.2 bpa.

As for soybeans, this year's week 33 rating of 700 is above the year ago 692 though still the third lowest since 2012.

The r squared figure for soybeans quite a bit lower than corn at 37.3% as there is still quite a way to go for soybean development but plugging the 700 rating into the formula results in a yield 0.7% above this year's 20 year trend of 52.2 bpa or 52.5 bpa.

The USDA still has a number of crop reports to be released and of course actual field results will be the ultimate arbiter but as we head into the final days of August it appears that the USDA corn yield of 175.4 bpa will likely be revised down while pending finishing weather, the USDA soybean yield has a good chance to attain or even exceed August USDA estimate of 51.9 bpa.

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