Corn Market Devastation
In a recent article posted by the Farm Credit Services of America on Twitter
#USDA world supply and demand estimates are due out this week for corn and beans. We used this as an opportunity to look at long-term trend yields – and what they might mean for 2018. #plant18 https://t.co/ZS1wbbnZq5 pic.twitter.com/uNJwRCuxYw
— Farm Credit Services of America (@FCSAmerica) May 8, 2018
David Widmar, a Purdue University Agricultural Economist is quoted saying:
“As you hear discussions of yields, keep in mind the average for corn is nearly 170 bu., and a range of 160 to 180 is possible. The high end of that range would be devastating to markets.”
Previous posts have discussed the need to avoid the hype and ensure you have the facts regarding current yield forecasts for the grains markets.
Statements like “The high end of that range would be devastating to markets” might cause some concern. A few facts from the CropProphet 2018 corn yield forecast might be useful .
Is 180 bpa corn likely?
The CropProphet estimated national trend yield forecast for 2018 is 171.8 bu/acre. The average is not “nearly 170”, it’s greater than 170, based on trend yield estimates. The May 10th USDA yield estimate is even higher, but we think it is biased high based on the USDA methodology.
What are the chances of market devastation caused by 180 bu/acre corn yields in the US? Based on the chart below, updated and available on a daily basis in CropProphet, there is approximately an 8% probability of corn yields being greater than 180 bu/acre. 8% is not 0%, so devastation is still possible but it’s pretty unlikely. As the weather evolves day-by-day and the CropProphet corn yield forecast integrates the information of the impact of weather on corn yields of each and every day’s weather conditions. The probabilities will change and the market will be able to keep track of the likelihood of devastation each day of the growing season.
Avoid the hype. Get the Facts. Use CropProphet for your Grains Market Intelligence.