USDA Crop Condition Report Implications – May 29, 2018

USDA Crop Condition Report and Yield

One Minute Summary

  • The season’s first USDA Crop Condition report provides limited but valuable guidance regarding the implications for US corn yields.
  • A good + excellent percent greater than 67 suggests greater than trend yields.   Less than 67 suggests less than trend yields.
  • The May 29 Report indicates 79% of the national crop has good + excellent conditions.   This suggests that we can expect a 4.2% positive deviation from the national yield trend, pending the rest of the summer, however.  The national yield implied is 178.9 bu/a.
  • More details will be forthcoming once we’ve processed the full detail of the crop condition report (see update below)

Implication of the Crop Condition Report

On May 29, 2018 the USDA released its first corn condition report of the 2018 season, indicating that 79% of the crop is estimated to be good or excellent.  This implies a national corn yield of 178.9 bu/a for 2018, 4.2% above the national trend.   It is important to remember, however, that it’s still only May 29th and a majority of the growing season remains.  We can certainly expect continued impacts of weather on corn yields.  For example, the 2012 initial crop report came in at 77% of corn at good to excellent, but the subsequent drought severely negatively impacted yields that year.

Relationship of Initial Corn Condition with Yields

While some people question the value of the crop condition reports to estimate national yield trends, we find that it has predictive value.  It is an input to our corn yield forecast system as we have rigorously determined the importance of this information for end of season yield prediction.  By tomorrow, CropProphet will have included a full update to our yield and production forecast for 2018 based on the detailed information provided by the USDA Crop Progress Report.  We will also update this post with some additional context.

The predictions for corn yield and production will evolve over the remainder of the crop season based on the upcoming weather.  CropProphet is designed to facilitate the daily monitoring of yield forecasts based on “season-to-date” weather and forecasts of upcoming weather.  No longer do you need to guess at the impact of weather on crop yields, because CropProphet quantitatively estimates these impacts for you.

Avoid the hype. Get the facts.  Use CropProphet for your Grains Market intelligence.

[Update May 30, 2018]

The USDA’s initial corn condition report was remarkably positive, with 79% of the crop rated in the good or excellent categories.  Since 1986, only one year – 1991 – started with a better corn rating.

At this point in the season, the crop condition data is fairly valuable as a predictor of end-of-season yield, although of course the outcome is still very uncertain as the majority of the growing season is yet to occur.  CropProphet uses the crop condition data early in the season to help improve the yield and production forecasts on the state and national level, but as the season advances the county-level weather and satellite predictors become much more important than the crop condition reports.

In response to the new and positive information from the USDA report, the CropProphet corn forecasts have seen a significant upward adjustment, with expected US yield and production jumping up by 3.9 bushels per acre and 106 million bushels respectively.  From the standpoint of production, the most significant gains were in Iowa and Illinois (see graphic below).  Going forward, the state and national forecasts will continue to respond to the weekly USDA updates, but county-level information will increasingly drive the CropProphet forecasts as the season proceeds.