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CME: Corn Yields Expected to Reach All New Record

by 5m Editor
30 September 2009, at 7:16am

US - A lot of the conversation in the marketplace has focused on the yield potential for the current crop, write Steve Meyer and Len Steiner in their Daily Livestock Report for 29 September.

Grain harvest is already underway in a number of states but as the charts below illustrate, crop maturity and harvest progress so far are well behind year ago and five year average levels.

The latest USDA report indicated that corn yields this year are expected to be 161.9 bushels per acre, which would be a new all time record. The best crop yield on record was registered in the fall of 2004, with average yields 160.3 bushels per acre. Clearly if such a crop materializes it would be welcome news for livestock and poultry producers that are struggling with negative margins and soft domestic and export demand.

However, there is plenty of uncertainty surrounding the current crop. Corn futures have been trending higher in recent days as the market seeks to evaluate the potential damage that frost could have on the current crop. The current corn crop is far from mature, with crop maturity well behind 2008 levels and even further behind the five year average. The latest USDA report indicated that through week ending September 27 only 37 per cent of the US corn crop had matured, this compares to 49 per cent a year ago and 72 per cent a year ago.

In 2004, the year that many people are looking to in terms of yield potential, 58 per cent of the corn crop had matured by week 39. As for the corn harvest, it follows the delays in crop maturity and this was the first week that USDA provided a reading on harvest progress, the latest harvest reading going back at least 20 years. For the week ending September 27, only 6 per cent of the US corn crop had been harvested, compared to 8 per cent a year ago and 18 per cent for the five year average. For the comparable week in 2004, 16 per cent of the crop had been harvested.

The point in all the discussion about crop maturity and harvest progress is the potential impact that frost will have on final yields. It has been shown that a corn crop that is harvested before it is mature will tend to produce several points below potential. What is the loss potential this year is all subject to speculation, depending on when the first major frost hits the US corn belt.

Then there is also the issue of the impact that cool, cloudy weather this summer had on kernel development and ear fill. It is one thing to judge corn crop conditions based on the number of ears and another as to how well those ears were filled. The USDA crop condition report continues to point to a very good crop, with 68 per cent rated in good or excellent condition. Let’s hope mother nature cooperates in the next few weeks.