Corn Update – July 3, 2017

The deterioration in U.S. corn prospects that was evident in the first half of June came to a halt later in the month as much cooler temperatures developed throughout the Corn Belt and significant rainfall occurred in some key growing areas (see figure below). The change to cooler conditions was dramatic, with freezing temperatures reported in some parts of North Dakota and South Dakota. Remarkably, Minneapolis was more than 7°F cooler in the second half of the month than in the first, which is unprecedented in 80 years of climate measurements. Freeze damage affected some corn fields in the Dakotas, but only in areas that produce very little corn compared to the major growing districts farther east and south; the cooler weather was beneficial for corn in most areas.

 

The change to generally more benign weather conditions allowed the CropProphet U.S. corn yield and production forecasts to remain nearly unchanged in the past two weeks, although a notable improvement occurred in the most recent daily update as favorable July weather and satellite information is now contributing to the forecasts (see figure below). July is easily the most important single month for determining corn outcomes in the central U.S., and consequently the CropProphet models show greater sensitivity to weather and satellite predictors at this time of year.

 

 

Despite the stable U.S. outlook, CropProphet’s county-level yield forecasts have shown a wide range of trends in the past two weeks (see figure below). A region of notable improvement is evident from Kansas and Missouri across western Iowa to southern Minnesota, but corn conditions have deteriorated in the Dakotas and northern and western parts of Nebraska owing to intensifying drought. Satellite data indicates that the production-weighted vegetation health index (NDVI) is now the lowest on record (1982-present) for the time of year in South Dakota. There has also been a narrow zone of rapid deterioration from southeastern Iowa to central Illinois, where June rainfall was much lower than in surrounding areas (see figure below).

 

 

The June 30 USDA acreage report indicated a 1% increase in planted acreage for corn in comparison to the March 31 prospective plantings report. A large increase of 400,000 acres (12%) was reported for North Dakota, but a modest decrease was indicated for South Dakota, and the changes in other states were mixed. CropProphet assimilated the new acreage information on July 1, leading to corresponding changes in the production forecasts (see figure below).

The next update to the corn commentary will occur on July 18.