Fundamentally Speaking

Since the end of June, March corn has been trapped in a 40-cent range between $4.10 and $4.50 as a somewhat supportive demand situation is offset by a sizable U.S. crop just harvested and what appears to be a very favorable outlook for the South American crop.

It is true that the U.S. has seen back-to-back years of record high corn yields with this season's 183.1 bushel per acre (bpa) resulting in the second largest crop ever at 15.143 billion bushels (bb).

This is on top of the year ago record production of 15.341 bln bushels with a second best 177.3 bpa yield.

Still, it has been a while since we knocked the cover off the ball regarding U.S. corn yields in certain respects.

Along these lines, this chart shows the U.S. corn yield in bpa on the left-hand axis (LH) while reported on the right-hand axis is both the annual yield as a percent of the 25-year trend and the harvested/planted ratio acreage ratio.

Also reported with the figures in orange boxes is the number of top 18 producing states that set yield records with data from 2000 to the November 2024 USDA production report.

This year's yield is the best ever but only 1.3% above the 25-year trend figure of 180.8 bpa while the year ago record of 177.3 was actually 0.9% below its trend calculation of 178.9 bpa.

Note also that this year's harvested to planted ratio of 91.1% is just equal to the 25-year average and below the 10-year average which is interesting given that there is somewhat of a relation between high yields and an above average harvested to planted ratio and vice-versa.

Will point out that seven of the top 18 states set yield records, all in the Midwest vs. just two a year ago.

If we were to characterize knocking the cover off the ball yield-wise, a figure 5% above the 25-year trend would seem reasonable and we have not seen that in the U.S. for a while.

Since 2000, the years 2004, 2009, 2014, 2016 and 2017 had yields 5% or more above the 25-year trend, and like last year and this year, were record highs.

2004 was quite stellar in a number of respects with the final yield that season 160.3 bpa, 11.3% above trend with 13 of the 18 states setting records, the best for each metric since 2000 with a harvested to planted ratio of 90.9%.

2009 saw yields 7.3% above trend with ten states setting record yields and a high harvested to planted ratio of 92.0%.

2014 saw yields 5.3% above trend with seven states setting records and harvested to planted ratio of 91.8%.

2016 saw yields 5.1% above trend with five states setting records and a very high harvested to planted ratio of 92.3%.

The following year saw yields 5.2% above trend with six states setting records and harvested to planted ratio of 91.8%.

In retrospect, the 2024 U.S. corn crop could have been one of those outstanding years but heavy late June rains in much of the Upper Midwest that capped acreage and yields certainly one factor.

Another is the dry finish to the crop with little rain from late August all the way into mid-October throughout the Corn Belt.

This is probably linked to the 0.7 bpa decline in the 2024 yield down to 183.1 as given in last month's crop production report.

We'll see next month whether the final crop yield once again is lower and this year's corn crop is merely good but no "home run".

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