Will the USDA Lower Yields on the July WASDE?
Jul 11, 2017
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This growing season has had it’s fair share of issues. A wet planting season followed by periods of hot an dry has cause some crop stress, especially in the Northern Planes. With crop conditions coming down going into the July World Agricultural Supply and Demand Estimates report the question is – Will the USDA lower yields for corn and soybeans?
As of July 9th soybeans are rated 62% good to excellent compared to 71% last year at this time. While this is a significantly lower crop rating than last year the key development state of soybeans is not until August. For that reason the USDA has historically been very reluctant to change soybean yields earlier in the growing season. For the last 15 years the USDA has left the soybean yield unchanged on the July report almost every year with one notable exception – 2012 when the soybean crop was rated at a miserable 40% good to excellent (on July 9th 2012).
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For corn there is a similar situation as far ac current conditions go. As of July 9th the corn crop was rated at 65% good to excellent compared to 76% last year at this time. Here too the USDA has been reluctant to make big changes on yield in July reports because July is the key development month for corn. While historically there are a few more changes in yield in the July report than for soybeans the changes are mostly small with again one exception – 2012 when corn conditions were also only 40% good to excellent. Other small changes came in 2003 when they raised yield 3 bushels an acre and in 2005 when they lowered yield 3 bushels an acre.
It seems rather unlikely that we will see much of any change in the soybean yield on the July WASDE report. Corn is more interesting, but again the USDA prefers to play it safe and punt for the August report where we can see bigger adjustments. While it is possible that the USDA feels the recent decline in corn conditions and the 11% lower good to excellent rating could justify lowering the yield it seems that more than a 3 bushel an acre reduction would be a big surprise. And again, more often then not (14of the last 17 years)they leave it unchanged.
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DecemberCorn Daily chart:
NovemberSoybeans Daily chart:
Producers looking to hedge all or a portion of their production may be rather interested in some of the options / options-futures strategies that I am currently using.
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