Corn and soybean crops in the U.S., the world's largest grower, may be smaller than the government predicted after planting delays and an unusual dry spell, said Jerry Gidel at North American Risk Management Services Inc.
Parts of the Midwest, the main growing region, received
less than 50 percent of normal rainfall in the past 30 days, according to the High Plains Regional Climate Center in Lincoln, Nebraska. Corn plants that farmers will begin harvesting next month are growing at about half the five-year average, and the rate of pod-filling by soybeans is 17 percentage points below normal, U.S. Department of Agriculture data show.
Corn prices plunged 43 percent in the past year partly because the USDA predicted the second-largest crop ever, and soybeans are down 23 percent on the government's forecast for record production of the oilseed. Analysts, traders, farmers and processors who start the annual seven-state Professional Farmers of America Midwest Crop Tour today probably
will find fields are likely to produce less than expected, Gidel said.
"This year's crop isn't as good as it looks from the road," said Gidel, an agricultural market analyst in Chicago.
The government's estimate of average weight for corn ears is too high, and flooding has stunted early development of the soybean crop, reducing the average number of pods, Gidel said. Late planting also increases the risk of damage from frost because crop maturity is delayed, he said.
Inspecting FarmsMore than 70 participants in the crop tour will inspect more than 1,000 farms in Ohio, Indiana, Illinois, Iowa, Nebraska, South Dakota and Minnesota over the next four days. Pro Farmer, an agriculture industry newsletter, will compile the results of the inspections into daily crop observations and then release its own estimate of the U.S. crop size on Aug. 21.
Pioneer Hi-Bred, the world's second-largest seed producer and a unit of chemical maker DuPont Co., is sponsoring this year's Pro Farmer tour.
"I'm going with the USDA numbers until I go out and see the crops for myself," said Chip Flory, the tour director and editor of the Pro Farmer newsletter. "We will look to confirm or contradict the USDA forecasts for record ear counts and record soybean production."
On Aug. 14, corn futures for December delivery on the Chicago Board of Trade fell 4.25 cents, or 1.3 percent, to $3.2775 a bushel. Soybean futures for November delivery fell 37.25 cents, or 3.7 percent, to $9.815 a bushel.
Conditions Are Declining"Farmers who received rain the past month are looking at some huge yield potentials, but if they missed the rain, the conditions are declining," Flory said. "The other concern is the lateness of the crops, which are at least two weeks behind normal and more susceptible to freeze demand."
The USDA predicted a corn crop of 12.761 billion bushels, based partly on surveys of farmers in July and August and field observations. That's up 5.5 percent from last year and second only to the 13.04 billion harvested in 2007, when farmers planted the most acres since 1944.
Corn yields will rise to 159.5 bushels an acre, up 5.6 bushels from last year and the second highest since 2004, when farmers collected an average 160.3 bushels, the department said.
About 68 percent of the corn crop was in good or excellent condition as of Aug. 9, compared with 67 percent a year earlier and the ninth-highest for the date since 1986, the USDA said last week.
Delays, Ear SizeThe improved crop conditions reported by the government don't capture the impact of planting delays from June rains and unusually low temperatures, said William Fordham, the president of C & S Grain Marketing Inc. in Ohio, Illinois.
The corn-ear size is determined early in the plant's life cycle, when plant growth this year was stunted by saturated soils and cool summer weather, Fordham said. Yields will be lower than forecast by the USDA, which probably used ear weights that were too high, he said.
About 24 percent the crop in the top 18 corn-growing states was beginning to fill kernels with sugars and starch as of Aug. 9, down from 28 percent a year earlier and 46 percent on average the prior five years, the USDA said Aug. 10. The government will update its condition assessment later today.
Production of soybeans, the second-largest U.S. crop after corn, will reach a record 3.199 billion bushels, up 8.1 percent from 2.959 billion last year, the USDA said Aug. 12 in its first output estimate of the season based on farmer surveys. A record 77.7 million acres was planted this year, the department said.
Soybean YieldsThe USDA forecast soybean yields will rise to 41.7 bushels an acre, the highest-ever August prediction by the government and up from the 39.6 bushels collected last year. Farmers harvested a record 43.1 bushels in 2005, after August rains and an extended growing season boosted final yields.
Fordham said soybean production may be reduced by
white mold, a fungal disease caused by wet, cool conditions in parts of the Midwest that is spreading in the region.
An estimated 55 percent of the soybeans in the top 18 producing states were setting pods on Aug. 9, down from 57 percent a year earlier and an average of 72 percent the prior five years, the USDA said last week. About 66 percent of the soybeans were in good or excellent condition on Aug. 9, up from 63 percent a year earlier.
The U.S. corn crop was valued at $47.4 billion in 2008, followed by soybeans at $27.4 billion, government figures show. The U.S. is the world's biggest exporter of both crops.
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