Soybeans Update – July 18, 2017

Persistent weather patterns have reinforced the contrast in rainfall and soil moisture patterns across the central United States in recent weeks. Continued dry and hot weather in the northern Plains has led to intensification of the drought there, and rainfall has also been significantly below normal across many areas west of the Mississippi River; moderate drought is now evident in a few portions of Iowa and Nebraska. However, wet weather has continued in Indiana and Ohio (see figure below).



Despite the west-east contrast in moisture conditions across the main soybean growing areas of the Midwest, the CropProphet yield forecasts have risen in most areas in the past two weeks (see figure below); significant improvement is indicated both in the west (western Iowa, eastern Nebraska, southeastern South Dakota, and southwestern Minnesota) and the east (Ohio). The state-level soybean yield forecasts have risen in every state except South Dakota, and the most likely U.S. yield is now about 1 bushel per acre above the long-term trend (see figure below).




The improvement in soybean prospects has occurred in response to strong improvement in satellite indications of soybean health; the figure below shows the change in the satellite vegetation health index (NDVI) from June to the most recent analysis. The NDVI anomaly, which is the difference from normal for the time of year, has increased significantly in many of the key growing districts, and in fact 97% of the top growing counties have a higher NDVI anomaly now than at the end of June. The positive indications of soybean health in western growing areas are surprising in view of the dry weather, although most of the soybean acreage is not yet severely dry, and it is well-known that soybeans are quite tolerant of dryness until the critical pod filling stage later in the season.



Looking ahead to the next two weeks, heat and drought are expected to persist in the Northern Plains, and the CropProphet weather outlook component suggests that the weather will eventually become detrimental for soybean prospects in northwestern growing areas (see figure below). However, additional significant yield gains are expected in Ohio, and the aggregate U.S. yield is not expected to suffer. CropProphet users should bear in mind that the forward-looking weather outlook component of CropProphet takes the weather forecast into account but cannot estimate potential changes in the satellite predictors, and therefore the CropProphet yield estimates may continue to outperform in the short-term if satellite indications continue to improve.

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