Fundamentally Speaking

Last week, USDA lowered its projection of the 2024 U.S. corn yield by 0.7 bushels per acre (bpa) to 183.1 bpa and that of soybeans by a record large 1.4 bpa to 51.7 bpa from the October to November crop reports. These declines were greater than anticipated by the trade, especially for soybeans, and very well could be linked to an extremely dry end to the 2024 growing season in much of the key corn and soybean growing regions.

Much of the country besides the Midwest, Plains and Delta have experienced bone-dry conditions for a while with a number of large and destructive fires seen this week throughout the Northeast and in California. As we noted in a prior post, it is thought that the soybean yields this year were negatively impacted by the exceptionally dry weather seen over the past 10 weeks in much of the nation's key soybean producing areas.

From the middle of August until the last week of October soybean pod seed weights were negatively affected and the same thing could be said of corn ear weights.

The accompanying chart shows October 2024 and total August-October 2024 precipitation totals for the top corn and soybean growing states and even the U.S. as a percent of their respective 1895-2024 averages on the left-hand axis. On the right-hand axis is the difference of the October 2024 temperature from the 1895-2024 average October reading in degrees Fahrenheit. The figures in the yellow boxes are the rank of October 2024 precipitation from 1895-2024 with 1 the driest and 129 the wettest.

The updated October NOAA figures show the U.S. recorded its second driest October ever at less than an inch at 0.95 inches, which is 57% below the 1895-2024 average, while the U.S. Aug-Oct total at 5.70 inches was 22.3% below average.

As an aside, the end-of-October Palmer Drought Severity Index at -3.81 is the worst since the drought year of 2012. With the exception of Colorado, every other top producing corn and soybean state had below average October rains and only North Carolina along with Colorado had above average moisture for the August-October 2024 period. Indiana, Kentucky and Texas had their driest Octobers ever with North Carolina the second driest and Tennessee its third driest.

In addition to dryness, temperatures have also been unseasonably warm throughout most of the country, which is no surprise given the parched soils. All top corn and soybean bean states and the U.S. as a whole had above average temperatures in October with the southern states really baking. Texas readings were 6.5 degrees above average as their average temperature last month at 72.8 degrees was the warmest October ever. Arkansas and Louisiana also saw their warmest Octobers ever with Colorado, Illinois, Kansas and Mississippi their second warmest.

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