Fundamentally Speaking
Corn Crop Ratings Remain at High Levels in August
New contract lows for corn were seen last week with the spot contract trading down to $3.68, while new crop December looks to get there given the idea that big crops get bigger.
Last week, USDA reported 2024 U.S. corn yield at an all-time high 183.1 bushels per acre (bpa) and good rains seen across most of the Corn Belt recently should seal the deal on record yields with a question of just how high.
This chart shows the week 30 or around the end of July corn crop ratings and the week 35 ratings or around the end of August.
P[L1] D[0x0] M[300x250] OOP[F] ADUNIT[] T[]
These are plotted on the left-hand axis using our usual ratings system weighting 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 change in USDA U.S. corn yield estimate from the August to September report in bpa.
The figures in the yellow boxes above the week 30 rating is the percent final U.S. corn yield deviated from 2000-2023 trend.
The week 30 corn rating this year was 744 and though we do not know what it will be in week 35, the current rating is down just slightly from there at 738.
Assuming that stays the same until week 35, which seems reasonable given continued favorable weather seen so far this month, that would be the highest end of August rating since 2018's 744 rating, a year in which the yield rose by 2.9 bpa in the September report from the August estimate with final yields 4.0% above trend.
Years 2014-2016 all saw week 35 ratings at 774, 748 and 770 with final yields 5.4%, 2.6% and 5.2% respectively above trend, though 2015 and 2016 saw Aug to Sep yield declines.
USDA has cut yields from Aug to Sep in four of the past five years, but given crop ratings have stayed at high levels, it seems reasonable to assume a higher yield forthcoming in the September report.
As noted in an earlier piece this week, the current 183.1 bpa yield, which is only 1.4% above trend, could rise to 184.2 to 186.0 bpa if final 2024 yield is 2-3% above trend.
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