Fundamentally Speaking

As we look ahead to the first official 2024 corn and soybean crop production report in August, USDA is currently projecting record yields of each at 181 and 52 bushels per acre (bpa) respectively.

Current high crop ratings and favorable weather so far in July seems to justify this estimate and yield estimates for some other crops already released further accentuate this point.

Two large corn and soybean producing states in the western parts of the Corn Belt, Kansas and Nebraska, are having much higher winter wheat yields than a year ago and both are having very good corn and soybean ratings with NE actually the best of the top 18 producing states for both crops.

Meanwhile in the Upper Midwest and Northern Plains, current oat and spring wheat ratings are among the best in years as USDA last week projected record yields for both crops at 70.9 bpa for oats and 53.1 bpa for spring wheat.

That could mean very good corn and soybean yields could be seen in the states that produce a lot of spring wheat and oats including Minnesota, North Dakota and South Dakota.

This chart shows the crop ratings for the U.S. oat and spring wheat crops as of week 28 or the second week in July on the left-hand axis (using our usual ratings system 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).

Reported on the right-hand axis is the percent that the final yield of each crop deviates from the 2000-2024 trend and for this year we use the July WASDE estimates.

Assuming that soil moisture conditions were related to both crop conditions and yield deviations, the figures in the yellow boxes are the percent of North Dakota in D1-D4 drought as of the second week in July. ND is by far the largest spring wheat producing state and also the largest state with regard to oats output.

USDA reported oats conditions at 718 this week, which is the highest since 2020, while the spring wheat rating of 768 is the highest since 2018 and second best since 2005.

This is one of reasons USDA has pegged the 2024 oat yield 6.2% above the 25-year trend and the spring wheat yield 9.3% over trend.

We should note that correlation between week 28 oat ratings and percent final yields deviate from trend 51% vs 81% for spring wheat.

Seeing that just 2.2% of North Dakota is in any form of drought as that state, along with others in that part of the country, has seen bountiful precipitation over the past few months.

This is a far cry from just three years ago when the whole state was covered in some form of drought with half in the worst categories.

This resulted in the 2021 U.S. oat yield of 7.2% below trend and the spring wheat yield a stunning 30.7% below trend.

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