Fundamentally Speaking

The September crop production report is due on Thursday, and we are seeing that average trade estimate for 2024 soybean yield at 53.2 bushels per acre (bpa), which would be unchanged from the USDA August projection which is a new record.

Despite not having the most favorable finishing weather in terms of moisture it appears that the corn crop was far enough along where a very dry last half of August that has continued into the first week of September (especially in the southern Midwest, Ohio Valley region and Delta) over past month has probably taken a larger toll on the soybeans grown in those regions of the country though the average trade guess for the corn yield is down 0.5-0.7 bpa from the August estimate.

Using 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) this graph is similar to what we did with corn and plots the percent change in the U.S. and top 18 soybean growing states ratings as of the beginning of this month vs. the first week of September ratings a year ago and also the percent change in yields from the August 2024 USDA projection vs. the final 2023 yields also for each of the top states and the U.S.

The crop rating for each state as of September 2, 2024, is recorded in the green boxes.

There is a decent relation between the change in soybean crop ratings as of the first week in September vs. the percent change in yields vs. a year ago with the correlation over 74% though that is not as high as corn's correlation of 86%.

It is pretty clear that high positive ratings changes are associated with an increase in yield as the highest rating as of beginning of September this year is Iowa at 780 which is 16.1% above its year ago rating and with yield at 61 bpa at just 5.2% above last year this is a state where the USDA may increase its yield from its August projection.

A similar situation is seen in Missouri where the current rating of 752 is the third highest though USDA's yield estimate at 51 bpa is up just 6.2%.

The worst rating in terms of number and relative to a year ago is TN at 634 which is down 18.1% from last year yet yield is only down 3.9% followed by OH with a rating last week of 638 which is down 17.1% from last year yet the August yield estimate at 59 bpa is 1 bpa, or 1.7%, above last year's final as that number seems ripe for some downward revision.

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