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According to the heat units, it looks as if we’ll have an early harvest. So what does that mean for yields? Can we have another corn yield that’s above trend line? If so, it would need to be 170 bushels per acre or better. If you look at a corn yield chart from 1975 forward, we’ve been above the trend yield line numerous times but only three years in a row in the late 1980’s. The last four years we’ve been above trend yield on corn for a new record and this year’s USDA projection of 174 would make it five years in a row.
Considering what we see for weather issues around the U.S., it sure seems that having another crop above 170 bushels per acre may be a stretch. When looking at the 5-year average of the U.S. corn yield, you come up with 169.7 bushels per acre and it always seems that the law of averages will win out. This is not to be confused with “Murphy’s Law” – that would be a whole different discussion.
If we look at the USDA S&D Comparison Chart, you will see that back in 2013/14, the stocks to use percentage was below 10% and corn was above $4. Since that time, we’ve had the stocks to use above 12 percent and sub-$4 corn. Does that mean if we go below the magic 10 percent stocks to use we’ll have $4 corn? Not necessarily, but it would definitely seem to have a better chance.
Keep in mind world crops also play into the pricing formula and is always a variable that can be even more elusive than the U.S. crop numbers. This is why we recommend not betting the farm on one plan and that you use multiple tools to cover some of the risk. If you have a need for marketing help, talk to Jason or a member of our grain marketing team.
Watch your bins if you have grain left at home! We’ve seen more damaged grain showing up at the scales and hear about more around the countryside, but be safe doing it.
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