News

AUGUST 24, 2012
By: Pro Farmer Editors

2012 Midwest Crop Tour: Eastern Leg
Pro Farmer pegs 2012 U.S. corn crop at 10.478 billion bu.; avg. yield 120.25 bu. per acre
+/- 1% = 10.374 billion bu. to 10.583 billion bu.; 119.05 bu. to 121.45 bu. per acre
Pro Farmer pegs 2012 U.S. soybean crop at 2.60 billion bu.; avg. yield of 34.8 bu. per acre
+/- 2% = 2.548 billion bu. to 2.652 billion bu.; 34.1 bu. to 35.5 bu. per acre

NOTE: We’ve made some adjustments to the acreage assumptions. Based on FSA certified acreage data we anticipate increases in planted acreage for both corn and soybeans. However, we are anticipating a harvested acreage percentage of 89.5% for corn and a slight downward adjustment in the harvested acreage percentage for soybeans. Learn how Pro Farmer estimates their yield expectations.

CORN
Ohio: 124 bu. 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 bu. per acre. Eastern Indiana showed extreme drought stress. A lack of ears and grain length pulled yields down.

Illinois: 116 bu. 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 bu. per acre. Corn yields in the western one-third of the state were down 11% 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 bu. 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 bu. 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% from year-ago, while dryland corn yields will be determined by kernel size.

South Dakota: 85 bu. 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 bu. 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 bu. 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 bu. 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 […]

The bulk of the bad news regarding the 2012 crops should be in by now, according to Tim Brusnahan with Brock & Associates Inc. Brusnahan, together with Dr. Chris Hurt of Purdue University, was a speaker at WATT’s August 13 webinar, “August Crop Report: Analysis and Implications.”
Brusnahan noted that with corn at $8.00 per bushel, there has been a shifting to alternatives such as feed wheat. Unfortunately, there is not enough feed wheat available to significantly impact corn demand. “So overall, we still have a fairly tight supply around the world,” he said.
Brusnahan also observed that erratic rainfall throughout the Midwest still leaves some volatility in the soybean sector, as final yields may come in lower than U.S. Department of Agriculture estimates. This will also provide opportunities for South America to plant large crops and take advantage of high prices.
He summarized that in regard to money flow, the large speculator remains long corn, soybeans, soybean meal, wheat, cattle, hogs and Class III milk. As to U.S. corn and soybeans, corn prices indicate zero carry and soybeans have a large inverse that should cause producers to move their crop to market at harvest. For ethanol, margins have improved and remain in a state of rebalancing. For DDGS, supplies and use are a little uncertain until more is known of Midwest corn quality.
Hurt, a professor of agricultural economics at Purdue, noted that the current drought will most likely end up being the second or perhaps third largest natural disaster in the U.S. in the last 30 years, after Hurricane Katrina and the 1988 Midwestern drought. “Bottom line, there’s not going to be enough corn to go around,” Hurt said.
For the animal industry, Hurt described conditions in the short run as being “very bleak.” He indicated that there will be losses for all species across the board for the next 12 to 14 months. “This will result in some liquidation of herds, it’s going to reduce supplies, and over time it’s going to bring up retail prices of those animal products and, therefore, the wholesale prices and the farm-level prices.”
However, Hurt said this will ultimately give cause for some long-term profits in late 2013 and into 2014 and 2015. The challenge, he noted, will be getting through the next 12 to 14 months.

USDA August crop reports this week
Attention on USDA’s first survey-based look
at the corn and soybean crops is greater than
normal as traders wait to see how low USDA
will go with its initial crop estimates.
Persistent drought conditions have greatly
trimmed yields. But yield is only one factor in
the total production equation. Another key is
how much USDA reduces harvested acres. In
June, USDA estimated harvested corn acres
at 88.851 million. That figure will be lower,
some feel significantly lower. In June, USDA
estimated harvested soybean acres at 75.315
million acres. USDA surveyed both planted
and harvested bean acres for August.
What NASS does with its Aug. 1 corn and
soybean crop estimates will largely determine
how aggressive the World Board must get
when cutting 2012-13 usage projections for
corn and soybeans.
No change in report times anticipated
The public comment period USDA sought
on report release times is closed. USDA
could change the time it releases key report
data, but our contacts signal that is not likely
ahead of the Aug. 10 reports.

AgResource producer sources suggest that US corn and soy conditions/yield potential have dramatically declined this week with corn not unfurling in the overnight cooling and ears that have no silks to be pollinated. Soybeans have stopped growing and are wilting under the afternoon heat. Another 3-5% decline in corn/soy GD/EX ratings is forecast for Monday with US corn yield potential now under last year’s 147 BPA. ARC argues that US 2012 soybean yield potential is under 40 BPA – and in fast retreat as larger share of the soy crop blooms.
The Central US forecast is little changed from prior days with the searing heat to relent across the Midwest on Sunday. Unfortunately, the chances for a soaking rain are poor over the next 10 days. A “ring of fire” weather/rain pattern will prevail for the next 3-4 days with showers arcing over the top if a high pressure Ridge. Rains are slated for the W and N Plains, MN, WI and MI and southeast through the Ohio Valley. Totals will range from .25-1.00”.
To the south (vast majority of the Midwest) rainfall totals are estimated in a range of .1-.6” with the frontal pass – with coverage pegged at 60-65% of
the area on Sunday/Monday. Such rain falls well short of crop needs or the ability to restore soil moisture.
Next week’s forecast calls for seasonal temps with highs ranging from the
80’s to the lower 90’s. Little or no rainfall is forecast for the Midwest as a front will be stalled across the lower Delta and the Gulf States with rainfall potential of .4-1.50”. A dry flow will persist across the Midwest into July 17
The Indian monsoon will continue to sputter for the next 10 days which is harming the soybean and ground nut crops. Crop worry is on the rise.
Without a soaking rain, any break in CBOT prices will be short lived/shallow.