Grains Market Devastation Analysis

Corn Market Devastation

In a recent article posted by the Farm Credit Services of America on Twitter

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.

CropProphet May 10 Corn Yield Analysis

CropProphet daily forecast corn yield forecast risk monitoring.

Avoid the hype. Get the Facts.   Use CropProphet for your Grains Market Intelligence.