Fundamentally Speaking

Despite the U.S. logging record corn yields three out of the past four seasons, final yields as measured by the 25-year trend have not been at trend or higher since 2018. This year, however, could be different as current USDA crop ratings are among the highest in years, reflective of generally very good growing conditions seen since planting.

It appears the 2025 U.S. corn crop emerged from last week's Midwest heatwave in decent shape as readings were not quite as toasty as had been advertised. Also, many sections of the Corn Belt, especially more northern and western areas, got some ample precipitation.

This attached chart plots USDA's 2025 average and maximum corn ratings for the period 2000-2025 by week on the left-hand axis. For this we use our usual ratings system where we weigh the crops based on the percentage 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 add the results.

On the right-hand axis is the percent that this year's weekly corn ratings deviate from the 2000-25 average and how the maximum rating ever on that week deviated from that average.

This year's U.S. corn rating has steadily improved through the month of July as it looks like pollination has for the most part proceeded very well with good rains and moderate temperatures. The week 29 corn rating last week at 770 is the fifth highest since 2000 and 5.7% above the 2000-25 week 29 average of 728.

The U.S. corn rating has held at this lofty 770 level for three straight weeks at a time when ratings seasonally decline as depicted in the chart. Even in the best of years, crop ratings do decline starting this week as shown by the maximum corn ratings each week, though at a slower rate than the average.

Weakness in corn futures over the past few weeks, even as this year's stocks-to-use ratio has declined, likely reflects trade ideas that the current USDA yield estimate of 181 bushels per acre (bpa) -- albeit a new record projection -- will be boosted next month in the USDA's first crop production report. I have seen estimates as high as 187 bpa with 185 bpa a more common estimate. It has been a while since U.S. corn yields were above trend and even longer where a particularly good yield, such as 5% above trend, has been seen. A positive yield deviation that large applied to current USDA weather adjusted trend yield of 181 bpa works out to 190 bpa. Even assuming a larger crop will result in higher demand, a yield that large would certainly push the 2025-26 ending stocks to well over 2.0 billion bushels.

But, remember, we still have a ways to go before this year's crop, which is looking quite promising, is in the bin.

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