The 2017 corn crop has something to offer everyone. Seemingly, this year’s theme is one of variability: concerns range from drought to too much moisture. So, depending on where you live provides a very different view of this year’s crop. As such, the next six weeks or so are going to be very telling in terms of where we ultimately end up in terms of total production.
In the meantime, USDA recently estimated nationwide yield average to equal 169.5 bushels per acre. Total production is forecast at 14.2 billion bushels, down 7% versus 2016 but still the third-largest crop ever produced. And that certainly had the market talking. While variability is true every year, 2017 has seemingly magnified uncertainty going into September.
Moreover, it’s especially important given that we have record-large on-farm storage; basis shifts in the coming weeks will provide an early indication of what’s occurring out in the country. Expectation for bigger yields will likely mean we’ll witness accelerated movement off the farm.
The general—or maybe loudest—sentiment among many producers has USDA likely over-estimating nationwide yield. That’s stimulated lots of back and forth chatter about what’s actually happening out there and USDA’s general ability to forecast final yields in August. To address some of those questions, this week’s illustration highlights USDA’s August accuracy since 2000.
The back and forth will continue going into harvest—that’s especially true because of wide-spread disparity through the heart of the Corn Belt. And as noted in previous columns, there’s tension in the market. That tension will remain until we start getting some solid yield numbers from the heart of corn country.
How do you perceive USDA’s ability to forecast yields prior to harvest? Where do you see final yields ending up? Where do you ultimately see the corn market headed? How does the crop look in your area? Leave your thoughts in the comments section below.
Nevil Speer is based in Bowling Green, Ky., and serves as vice president of U.S. operations for AgriClear, Inc. – a wholly-owned subsidiary of TMX Group Limited. The views and opinions of the author expressed herein do not necessarily state or reflect those of the TMX Group Limited and Natural Gas Exchange Inc.