U.S. corn, soybean yield ideas rising despite USDA setback

CHICAGO (B)--U.S. corn and soybean yield estimates are likely to remain on the rise despite the unexpected declines noted in the weekly government crop condition reports released July 31. The key remains the advanced maturity rate of this year's crop, which should improve overall kernel- and pod-filling capabilities compared with a typical season.

The weekly U.S. Department of Agriculture crop condition reports for both corn and soybeans showed small declines in crop ratings from south in Louisiana to north in Minnesota.

According to an index of crop conditions compiled by BridgeNews Global Weather Services, both corn and soybean conditions are at new five-week lows.

The GWS corn condition index showed the crop was down to 104.3 from 105.1 the prior week despite regular rain and no major heat stress across the heart of the corn belt. This was the lowest weekly rating since a June 25 rating of 103.9. This index assumes that a rating of 100 is roughly equal to a normal crop.

Soybean ratings also fell to match to their lowest level since the June 25 ranking of 102.5 as of July 30. That was down 1.3 points on the week.

But if the problems were anything serious, you can bet that farmers would be much more vocal about the disease, moisture or bug infringements on yields, several sources concurred.

"Sure, there are clients who have called to talk about their own individual problems, but most continue to whisper about how great everything looks," noted one Midwest broker-consultant.

"I really think this (USDA) report missed the weekend moisture," he added about the improved rainfall east of the Mississippi River. The rains came on the heels of a mini-dry spell.

Even as the USDA ratings were falling, a national corn yield forecast based on a model developed by Bill Tierney of Kansas State University rose to 142.9 bushels per acre from 142.0 a week ago. The latest yield forecast has a four-bushel margin for error.

But based on a USDA harvested acreage forecast of 73.088 million acres, average yield projection implies a corn crop of 10.440 billion bushels, far above the previous high from 1994, Tierney noted.

Again, for soybeans, while the USDA crop condition slipped, the Tierney model projects the national yield at 42.1 bushels per acre, up 0.6 bushels from previously and matching the model's season high set in mid-June.

Tierney said the soybean model projected average yields somewhere between 40.2 and 44.0 bushels per acre. Based on the model's average yield and a USDA harvested acreage forecast of 77.474 million acres, the model implies a record high U.S. soybean crop of 3.093 billion bushels.

The rise in yields, or perception of rising yields, also was confirmed by AgriVisor analyst Dale Durchholz in Bloomington, IL.

He recalled that conditions were rapidly declining a year ago after a month of dry weather. In 2000, however, crops are enjoying generally cooler temperatures and adequate moisture.

"I am not going to get excited about a one-week shift in crop ratings, Durchholz said. "The trend is what matters, and this year's crop started well and continues in good condition."

He also said that the USDA rating decline failed to take into effect the weekend rains in portions of the Midwest. As a result, the next ratings may jump to new highs, pushing yield models driven partially by those ratings to new highs.

Durchholz's own yield monitor showed a decline in the national average corn yield of 1.0 bushel per acre to 141.4 bushels based on previous USDA condition reports. That is still above the USDA forecast of 140 bushels.

His national soybean model projected a yield around 40 bushels per acre, down 0.5 bushels from previously and in line with USDA.

Durchholz thinks the trend in yields is sideways to higher, with the potential for corn and soybean yields to turn out 10% or more above trendline this year.

"Soybean yields could be huge," he warned. "And without a doubt, corn yields will be record high."

Recently, a smattering of talk has arisen about the somewhat poor state of the sweet corn crop, and what this might mean for field corn.

One reason that sweet corn has generally disappointed consumers this year is the growers harvested the crop late. Durchholz said this should not be construed as a sign of problems for the feed corn crop, which has been running about seven to 10 days ahead of normal development all season.

He also noted that in 1994, the year of record high soybean yields, soybeans bloomed a long time before starting to set pods. The 2000 soybean growing season has been very similar, and the pod-setting pace is actually starting sooner.

"The longer the crop has to produce and fill pods, the more weight goes into the final yield," he said.

"Fundamentally, corn still seems to have a bigger problem than soybeans," he said. "But no one is prepared for soybean yields to end up much higher than expected."