Fundamentally Speaking

We are seeing new contract lows for corn as prices continue to spiral lower on ideas that September's first field-based crop production report will maintain or perhaps increase the current USDA 2024 U.S. corn yield projection of 181 bushels per acre (bpa), a new record.

This chart shows the seasonal corn crop ratings by week with the average and plus and minus one standard deviations.

We use 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.

The study period is from 1986 to 2023, and we also report the 2024 corn ratings through this week's report which is week 30.

That rating is 744, which is above the 1986-2023 number and current five-year average of 726.

Furthermore, current crop conditions have so far bucked the usual seasonal downtrend with conditions actually improving slightly in the latest report through the key month of July.

2024 crop ratings actually fell below the 1986-2023 average by week 26, which was the end of June, but decent rainfall in much of the Corn Belt and temperatures that on the whole averaged below normal during July have led to a slight increase in corn conditions.

A simple regression using week 30 crop ratings vs. the percentage final yields deviate from 1986-2023 indicate a final yield 1.5% above the 1986-2023 trend, which this year is 182, meaning a yield of 184.8 bpa.

The 2000-23 trend yield at 180.5 bpa is closer to USDA and a regression just using 2000-2023 data implies a yield 2.0% above trend, or 184 bpa.

An above average week 30 corn rating and the fact that ratings actually improved in July, pointing to a stress-free pollination period, suggest a USDA corn yield estimate next month higher than its current projection.

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