Porto Alegre, August 29, 2022 – Pro Farmer’s numbers to corn surprise in states of US with good weather conditions. The US climate picture for 2022 had been pointing to higher-than-normal temperatures for the summer across the Midwest and more restricted rainfall on the western side of the belt. The market projected lower yields in August compared to the record of 2021, confirmed by USDA. However, the Pro Farmer crop tour brought surprises in states where everything seemed in good condition, such as Indiana, Ohio, and Illinois.
We must safeguard the criteria and scope between the Pro Farmer report and the USDA data. The crop tour coverage is much lower than that of USDA, and the criteria may point to differences that collide with the final data. In 2021, the productivity indicated in the crop tour of 177 bushels/acre coincided with the final data indicated by USDA.
Pro Farmer’s Note – The above national estimates reflect the Pro Farmer’s view on production and yields taking into account data collected during the crop tour and other factors such as crop maturity, historical differences in tour data versus USDA final yields, areas outside of those sampled in the tour, etc. This is why the state yield numbers below differ from the crop tour numbers. Based on data on planted areas certified by the Farm Service Agency (FSA) from August, the area planted with soybeans was increased by 500,000 acres, and the area planted with corn was maintained.
The following are Pro Farmer’s state-by-state corn yield estimates:
– Iowa – 198 bushels per acre. Of all the states sampled on the crop tour, Iowa had the highest variability. The state has a lot of exceptional corn, and some areas will produce the best yields ever. But there is also a fair amount of average and below average areas in the state;
– Illinois – 198 bushels per acre. Corn in Illinois was relatively consistent, but it lacked something to get a superior yield. In high-yield years, the southern third of Illinois, which was not sampled, did not drop the average. The southern Illinois crop is not bad, but it will not raise the state average;
– Nebraska – 164 bushels per acre. Dryland corn in the state is damaged. Even irrigated corn was harmed by the heat and drought. In addition, the state had hail and wind-induced damage;
– Minnesota – 191 bushels per acre. The central and southeastern areas of the state are doing better. Other areas of the state have some problems with excess heat;
– Indiana – 177 bushels per acre. The Indiana corn crop had many ears, but the grain length was an issue. Many of the cobs pulled during the crop tour had a noticeable abortion of grain at the tip;
– Ohio – 175 bushels per acre. Ohio has a very good corn crop, but it will not rival last year’s record crop. There is much more variability in the state this year, especially in grain length, which will delay the harvest;
– South Dakota – 122 bushels per acre. The sample occurred in the southeastern portion of the state, which is usually the ideal spot. That is not the case this year. Northern areas will do better, but the state as a whole has problems.
In this Pro Farmer assessment, average national yields were projected at 168.1 bushels/acre, well below the USDA and all local consulting firms (175.4 bushels). This means that there is a chance that USDA will cut the productivity projection in its next reports and, consequently, the production, which is currently estimated at 364.7 mln tons. The crop tour figure brings production to just over 349 mln tons. It must be noted that the evaluation and sampling criteria between the two institutions may differ. Of course, the survey generated by the crop tour is extremely relevant to the market and the expectations toward upcoming USDA reports and updates.
The difference between 365 and 349 mln tons in production estimates is significant for a year that does not offer good signs for carryover stocks. If the figures to be updated by USDA follow the crop tour, the projected ending stocks for 2022/23, the new business year that is beginning, could drop from 35 to 20 mln tons. Now, it seems natural that there is a need to ration demand (domestic and international) in case USDA follows the crop tour data.
The gravity of this situation is highlighted by two factors:
– Europe’s crop failure;
– A small loss of production in southern China.
The European crop starts to be estimated at 55 to 60 mln tons, compared to lower figures released last week in France and Germany. A loss of 15 mln tons can easily be replaced in part by wheat with good production in the region, as well as by imports from the East and the Americas. The Europe effect is already being registered in premiums in South America, as well as in the good volume being exported by Brazil and Argentina. This equalization of European supply will last until the 2023 season, in August/September. Until then, a greater transition of demand for wheat or imports will be frequent information.
The Chinese crop has its highest concentration of planted area in the center-northeast of the country. It is in this region where the large and more technified crops are found. This year’s drought, which affects river levels and puts the energy sector at risk, is in the south and southeast of the country. In these locations, the crops are small and concentrated in a colonial production regime. Of course, they can also be affected by the climate and must bring losses in these locations. The point is that great productivity in the northeast can offset part of the losses in the south. The detail of this situation is that the south concentrates the largest volume of corn demand, and a greater demand for imports may be possible in the first half of 2023.
Within this combination of factors in important hubs such as the United States, Europe and China, we must understand that the 2022/23 cycle gains precautionary aspects regarding global supply in these specific regions. In the first half, only the United States and Argentina will have corn to supply the global market. There are still wheat crops in Australia and Argentina to complement this picture. But, without a doubt, this seems to be a cycle with bullish prices in the international corn market and very dependent on the climate trajectory in South America.
Pro Farmer’s numbers surprise in states with good weather conditions
Porto Alegre, August 29, 2022 – The US climate picture for 2022 had been pointing to higher-than-normal temperatures for the summer across the Midwest and more restricted rainfall on the western side of the belt. The market projected lower yields in August compared to the record of 2021, confirmed by USDA. However, the Pro Farmer crop tour brought surprises in states where everything seemed in good condition, such as Indiana, Ohio, and Illinois.
We must safeguard the criteria and scope between the Pro Farmer report and the USDA data. The crop tour coverage is much lower than that of USDA, and the criteria may point to differences that collide with the final data. In 2021, the productivity indicated in the crop tour of 177 bushels/acre coincided with the final data indicated by USDA.
Pro Farmer’s Note – The above national estimates reflect the Pro Farmer’s view on production and yields taking into account data collected during the crop tour and other factors such as crop maturity, historical differences in tour data versus USDA final yields, areas outside of those sampled in the tour, etc. This is why the state yield numbers below differ from the crop tour numbers. Based on data on planted areas certified by the Farm Service Agency (FSA) from August, the area planted with soybeans was increased by 500,000 acres, and the area planted with corn was maintained.
The following are Pro Farmer’s state-by-state corn yield estimates:
– Iowa – 198 bushels per acre. Of all the states sampled on the crop tour, Iowa had the highest variability. The state has a lot of exceptional corn, and some areas will produce the best yields ever. But there is also a fair amount of average and below average areas in the state;
– Illinois – 198 bushels per acre. Corn in Illinois was relatively consistent, but it lacked something to get a superior yield. In high-yield years, the southern third of Illinois, which was not sampled, did not drop the average. The southern Illinois crop is not bad, but it will not raise the state average;
– Nebraska – 164 bushels per acre. Dryland corn in the state is damaged. Even irrigated corn was harmed by the heat and drought. In addition, the state had hail and wind-induced damage;
– Minnesota – 191 bushels per acre. The central and southeastern areas of the state are doing better. Other areas of the state have some problems with excess heat;
– Indiana – 177 bushels per acre. The Indiana corn crop had many ears, but the grain length was an issue. Many of the cobs pulled during the crop tour had a noticeable abortion of grain at the tip;
– Ohio – 175 bushels per acre. Ohio has a very good corn crop, but it will not rival last year’s record crop. There is much more variability in the state this year, especially in grain length, which will delay the harvest;
– South Dakota – 122 bushels per acre. The sample occurred in the southeastern portion of the state, which is usually the ideal spot. That is not the case this year. Northern areas will do better, but the state as a whole has problems.
In this Pro Farmer assessment, average national yields were projected at 168.1 bushels/acre, well below the USDA and all local consulting firms (175.4 bushels). This means that there is a chance that USDA will cut the productivity projection in its next reports and, consequently, the production, which is currently estimated at 364.7 mln tons. The crop tour figure brings production to just over 349 mln tons. It must be noted that the evaluation and sampling criteria between the two institutions may differ. Of course, the survey generated by the crop tour is extremely relevant to the market and the expectations toward upcoming USDA reports and updates.
The difference between 365 and 349 mln tons in production estimates is significant for a year that does not offer good signs for carryover stocks. If the figures to be updated by USDA follow the crop tour, the projected ending stocks for 2022/23, the new business year that is beginning, could drop from 35 to 20 mln tons. Now, it seems natural that there is a need to ration demand (domestic and international) in case USDA follows the crop tour data.
The gravity of this situation is highlighted by two factors:
– Europe’s crop failure;
– A small loss of production in southern China.
The European crop starts to be estimated at 55 to 60 mln tons, compared to lower figures released last week in France and Germany. A loss of 15 mln tons can easily be replaced in part by wheat with good production in the region, as well as by imports from the East and the Americas. The Europe effect is already being registered in premiums in South America, as well as in the good volume being exported by Brazil and Argentina. This equalization of European supply will last until the 2023 season, in August/September. Until then, a greater transition of demand for wheat or imports will be frequent information.
The Chinese crop has its highest concentration of planted area in the center-northeast of the country. It is in this region where the large and more technified crops are found. This year’s drought, which affects river levels and puts the energy sector at risk, is in the south and southeast of the country. In these locations, the crops are small and concentrated in a colonial production regime. Of course, they can also be affected by the climate and must bring losses in these locations. The point is that great productivity in the northeast can offset part of the losses in the south. The detail of this situation is that the south concentrates the largest volume of corn demand, and a greater demand for imports may be possible in the first half of 2023.
Within this combination of factors in important hubs such as the United States, Europe and China, we must understand that the 2022/23 cycle gains precautionary aspects regarding global supply in these specific regions. In the first half, only the United States and Argentina will have corn to supply the global market. There are still wheat crops in Australia and Argentina to complement this picture. But, without a doubt, this seems to be a cycle with bullish prices in the international corn market and very dependent on the climate trajectory in South America.
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