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Crop Survey: Corn, Soybeans headed for nine-year lows

Aug 31, 2012 || Pro Farmer || No Comments

The U.S. corn and soybean crops are expected to shrink to the smallest in nine years after severe drought hit most of the prime Midwest growing areas, advisory firm Pro Farmer said following its annual Crop Tour last week.

Farmers will harvest about 10.5 billion bushels of corn this year, Pro Farmer said August 24, citing results from fields surveyed in Illinois, Iowa and five other Midwest states. Based on Pro Farmer’s forecast, the harvest will be down 15 percent from the 2011 crop, the lowest since corn crop totaled 10.09 billion bushels in 2003.

Pro Farmer’s estimated U.S. corn yield, at 120.2 bushels an acre, would be a 17-year low, according to U.S. Department of Agriculture data.

The devastating impact of what, by some measures, is the worst U.S. drought since 1956 was evident as crop scouts found parched fields and stunted plants across the Midwest.

Corn in eastern Indiana, for example, showed “extreme drought stress,” Pro Farmer said. “A lack of ears and grain length pulled yields down.”

In South Dakota, Pro Farmer found “absolutely the worst corn crop we’ve sampled since 1998,” when the firm began surveying states in the region.

Pro Farmer estimated the U.S. soybean crop at 2.6 billion bushels, down 15 percent from last year and the smallest since 2.45 billion bushels in 2003. For nationwide yields, Pro Farmer projected the crop at an average of 34.8 bushels an acre, also the lowest since 2003.

The soybean crop from Ohio to Nebraska “needs a drink right now to realize these yield estimates,” Pro Farmer said.

Corn and soybean futures traded on Chicago-based CME Group rallied to all-time highs this summer as the drought stirred concern over tightening global grain supplies.

In late trading August 27, December corn futures rose ¼ cent to $8.08–¾ a bushel. December futures are up almost 60 percent since mid-June and reached a record high of $8.49 on August 10. November soybean futures fell 10–¼ cents to $17.21–¼ a bushel, after notching a record at $17.60–½ earlier in trading.

The following details Pro Farmer’s state-by-state yield estimates and observations on crop conditions from the tour, which ran from August 20-23:

CORN

Ohio: 124 bushels per acre. The Midwest drought started in northwest Ohio. South and east of there, extreme moisture and heat stress will guarantee below-average corn yields.

Indiana: 101 bushels per acre. Eastern Indiana showed extreme drought stress. A lack of ears and grain length pulled yields down.

Illinois: 116 bushels per acre. The eastern half of Illinois was the epicenter of this summer’s drought – and it was proven by this year’s tour. Corn yields were better in some western and northern areas of the state, but standability is a major issue.

Iowa: 139 bushels per acre. Corn yields in the western third of the state were down 11 percent from last year, but the real problem is in the eastern two-thirds of the state. Iowa’s early start to the growing season turned into a mid-season nightmare for corn trying to pollinate and fill kernels.

Minnesota: 152 bushels per acre. Crop District 7 is the problem in Minnesota, as is the western half of Crop District 8. Corn yield and plant health improved dramatically in the eastern half of the state, where yield potential is very good.

Nebraska: 138 bushels per acre. Kernel size is the villain in Nebraska, and that is what makes the Husker State a swing state on corn yields. Even irrigated yields were off about 10 percent from year-ago, while dryland corn yields will be determined by kernel size.

South Dakota: 85 bushels per acre. We hit South Dakota hard on harvested acres and yield. This was absolutely the worst corn crop we’ve sampled since 1998 when the Crop Tour started in the western Belt.

SOYBEANS

Ohio: 40 bushels per acre. In addition to low pod counts, heavy weed pressure in some of the state may hold down yields even more than indicated on the tour.

Indiana: 36 bushels per acre. This is where we started to see the trend of pods not forming on the lower half of plants. The lack of production factory hurts yield potential.

Illinois: 36 bushels per acre. The crop must work to hold onto what yield potential is there, as the crop is done blooming. Extremely dry soils could lead to pod abortion and further reduction in yields.

Iowa: 41 bushels per acre. Iowa’s soybeans are the “least bad” of a disappointing western Corn Belt bean crop. A lack of soil moisture at tour time nearly guarantees a smaller-than-normal bean size will weigh on average yields.

Minnesota: 36.5 bushels per acre. Crop Tour pod counts were even worse than expected. The growing season for northern Corn Belt beans seems to have put stress on yield potential from planting through Tour time.

Nebraska: 42 bushels per acre. Even in a drought year, Nebraska’s ability to give beans a drink when they need it will keep the state at the top of the nation’s soybean yields.

South Dakota: 28 bushels per acre. Soybeans haven’t earned a spot under irrigation pivots in South Dakota yet. As a result, we see serious sub-30 yield potential for beans.

General Observation: The bean crop from Ohio to Nebraska needs a drink right now to realize these yield estimates.

NOTE: Pro Farmer made some adjustments to the acreage assumptions. Based on Farm Services Agency certified acreage data, we anticipate increases in planted acreage for both corn and soybeans. However, we are anticipating a harvested acreage of 89.5 percent for corn and a slight downward adjustment in the harvested acreage percentage for soybeans.

This is an edited version of Pro Farmer’s 2012 crop survey summary. This first appeared on Pro Farmer and on CME Group’s Market Commentary.