Corn Update – July 18, 2017

The CropProphet forecasts for U.S. corn yield and production have risen significantly in the past two weeks, and the most likely U.S. yield of 171.8 bushels per acre is now slightly above both the long-term trend and the latest USDA estimate (see figure below). The improvement in the corn outlook began in early July as generally favorable weather and satellite data coincided with heightened sensitivity in the CropProphet yield models. The month of July is critical for determining corn outcomes in the heart of the U.S. growing area, and so far the CropProphet predictors have pointed to improving prospects relative to the challenges that were encountered earlier in the season.

 

A map of state-level corn yield forecast changes in the past two weeks (see figure below) reveals that improvement has been widespread, but the largest gains have occurred in Indiana and Ohio, where prospects were formerly very poor. The expected yield in Indiana remains 10 bushels per acre below the long-term trend value, but corn yield in Ohio is now close to trend according to CropProphet. The only state where prospects have worsened is South Dakota, where drought continues to expand and intensify. Indeed, rain has been scarce lately in most areas west of the Mississippi River, and the U.S. Drought Monitor shows that some portions of Iowa and Nebraska are now experiencing moderate drought (see figure below). If dry weather persists in this area, then further yield gains are unlikely, and indeed the CropProphet yield forecasts for Iowa and Nebraska have leveled off in the past few days.

 

 

 

Corn pollination is now well under way across the Corn Belt, with 40% of the U.S. crop reported to be in the silking phase according to the July 17 USDA crop progress report. The silking season is a particularly sensitive time for corn yield, as very hot and dry weather during pollination leads to poor fertilization and reduced kernel counts. In this context it is unfortunate that a spell of unseasonably hot weather is currently developing in the central U.S., although the heat wave is expected to be fairly short-lived as much cooler weather follows next week. CropProphet’s 14-day weather outlook component, which includes the effect of the 14-day weather forecast on yield and production, indicates that the heat wave is unlikely to be significantly damaging across most of the Midwest, and a relatively moist forecast for Illinois suggests that yields may increase there (see figure below). In contrast, however, the persistent heat and drought in the northern Plains is expected to be very detrimental over the next two weeks.

The next update to the corn commentary will occur on August 1.