Inside the Market

Early in 2024, it looked like corn planting would be done in record time, but that started to change in late April, when a series of severe weather events erupted, spawning damaging winds, hail and numerous tornadoes. An especially active weather pattern in the upper Midwest brought more severe weather and numerous rains across the region in May and early June, forcing producers to replant fields in many areas, where possible.

Typically, USDA's June 28 "Acreage" report would give us a fairly accurate assessment of how many corn acres were planted, and USDA did say at the time of the June survey that 88.1 million acres of corn and 73.3 million acres of soybeans were planted. Unfortunately, the information is only partly helpful, because USDA's definition of a planted corn acre is any acre that was planted at least once, regardless of what later happens to it. Until we get to the September "World Agricultural Supply and Demand Estimates" (WASDE) report, there is little accounting of the number of acres destroyed by flood, wind or hail.

After USDA's June survey took place, the weekend of June 22-23 was especially stressful for new fields of young corn as heavy rains and extensive flooding hit northwestern Iowa, much of southern Minnesota, southeastern South Dakota and part of western Wisconsin. Minnesota and Wisconsin already had high levels of surplus topsoil moisture even before the flooding. Many high-yielding corn areas saw three-day rain totals of more than 12 inches. Towns, roads, bridges and railways were damaged, and additional corn fields were flooded as the heavy gush of water flowed south, down the Missouri and Mississippi River Valleys.

Maybe it's because of social media, but hailstorms seemed more frequent and damaging this year, including the July 6-7 weekend when eight large hailstorms were reported in corn states, including a wide path in Iowa, south-central Nebraska and parts of South Dakota. A week later, on July 15, a derecho brought high, damaging winds, hail and flooding along a path from central Iowa to Indiana. The next day, heavier-than-expected rains flooded corn and soybean fields in southern Ontario, including the city of Toronto. Combined with all the other adverse events in 2024, USDA's September "WASDE" report should be especially informative this year, offering the first yield surveys from fields and having an updated estimate of harvested corn acres, supported by certified acreage data from the Farm Service Agency.

As I write this in late July, USDA is estimating a 15.100-billion-bushel corn crop, based on 83.4 million harvested acres and a record yield of 181 bushels per acre. I gladly admit there are many corn fields around the country that look fantastic, but there are also a lot of good, high-yielding areas that either won't have a crop or will suffer much lower yields. USDA's September corn production estimate will still be a rough approximation, but from this analyst's view, conditions are ripe for a balance sheet surprise.

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