In an earlier piece we ran a regression model of U.S. weekly crop ratings as of week 29, which is usually the third week of July, vs. the percent that the national corn yield deviated from the 1986-2014 trend.
This relation explains about 77% of the variability in U.S. corn yields and this projected to a prospective 2015 yield of 168.1 bushels per acre (bpa).
This seems higher than what the market is presently trading but we noted that current crop ratings are above the 10, 20 and 30 year averages.
This piece takes that approach one step further by running a regression model for each of the top 18 states looking at corn crop conditions as of the 29th week of the year (the third week in July) vs. the percent that each state's corn yield has also deviated from the 1986-2014 trend.
We note that the r squared for the U.S. model was that 77% but for the 18 top corn states the r squared ranged from 8.8% to 81.5% with an average of 60.7%.
As expected, the Eastern Corn Belt states of IL, IN and OK are faring the worst with prospective 2015 yields based on week 29 crop conditions respectively 4.8%, 8.8% and 5.2% below trend.
Conditions are supposedly quite a bit better out west with prospective Iowa yields 5.6% above trend and Minnesota 9.4% above trend.
These trend yields multiplied by the harvested acreage figures given in the USDA's June Acreage report were summed and then divided by 94%, which is the ten year average of the top 18 state production as a percent of the total U.S. corn crop, which resulted in a possible production figure of 13.2 billion bushels, which if divided by the 6/30 U.S. harvested acreage number of 81.10 million acres provides a yield of 164.2 bpa, close to what we think the market is trading.