Fundamentally Speaking

History of January Yield Revisions

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst

Based on a very stable late season crop conditions at a time of year when they usually decline, an extended growing season in the Midwest with a very late first fall freeze allowing even row crops in the Upper Midwest to reach full maturity and stellar reports from the field the USDA did increase both the 2015 U.S. corn and soybean yield estimates in the November crop production report.

What was surprising was the magnitude of the increase with the corn yield estimate hiked by 1.3 bushels per acre (bpa) to 169.3 bpa, the second highest ever next to last year's 171.0 and above the average trade guess of 168.2.

For soybeans a new all-time high yield of 48.3 bpa was established topping the year ago record of 47.5 bpa. This month's estimate was a sharp 1.1 bpa above the USDA's October projection and higher than the average trade guess of 47.5.

Now the question turns to the final crop production report to be issued January 12, 2016. Sentiment seems to be that with the USDA increasing both this year's corn and soybean yield projections from the September into the October report and then also the October into the November report that this pattern should continue with even higher projections early next year.

As a check we looked at those years since 1974 where that happened with the results reported in the accompanying graphic.

Since 1974 there have been 20 occurrences when the USDA hiked the U.S. corn yield from the Sep to Oct report and then the Oct to Nov report and half the time yields fell in the Jan report and half the time they rose with the average being a 0.2 bpa increase in yields.

Note the last time this happened in corn prior to this year was in 2005. For soybeans since 1974 there have been 18 occurrences when the USDA hiked the U.S. soybean yield from the Sep to Oct report and then the Oct to Nov report and 11 times yields increased in the Jan report, six times they declined and twice they were unchanged with the average being also a 0.2 bpa increase.

(KA)

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