NAPERVILLE, Illinois, Aug 28 (Reuters) - Every year in late August, the grain market carefully watches the Pro Farmer Crop Tour to gauge whether current U.S. corn and soybean harvest assumptions are sound, and they might have been this year if not for recent weather.
Most of the state-level tour results did not heavily dispute the U.S. Department of Agriculture’s yield predictions from earlier this month, though the Corn Belt is amid its third consecutive dry week, and last week’s heat accelerated crop stress.
This might suggest that the tour findings could reflect top-end potential, particularly for soybeans given the heavy reliance on August rains.
The Pro Farmer Crop Tour has been following the same routes in seven major U.S. corn and soybean producing states for more than three decades. Scouts count the number of soybean pods in a three-by-three-foot plot and estimate a rough corn yield, though they do not measure kernel depth, an important element in years with dry finishes.
There were no tour records in any states this year, though corn yields in Ohio and soybean pod counts in Indiana were somewhat close, in line with USDA’s outlook.
Pod counts and corn yields in top producers Iowa and Illinois were within 1% of the recent tour averages, somewhat consistent with USDA. However, tour scouts found west central Iowa crops in particularly rough shape, suggesting this year’s dryness may have had a larger impact there than expected.
Whether early season dryness in Illinois weighed on yield potential was of top interest on this year’s tour. The results imply minimal impact, though the situation might have been different had the Illinois crops been subject to any heat in June.
Minnesota soybeans did not appear to withstand this summer’s dry weather, as pod counts were 8% below average and the tour’s second-lowest of the last decade. Many pods in Minnesota, western Iowa and eastern Nebraska were still somewhat flat, indicating the need for moisture.
After the tour, Pro Farmer issues a U.S. corn and soybean production forecast which incorporates tour data and other lines of evidence, and these outlooks have had some recent success with predicting yield directions.
Pro Farmer on Friday pegged U.S. corn yield at 172 bushels per acre, below USDA’s 175.1 bpa and the year-ago 173.3. The advisory firm placed soybean yield at 49.7 bpa, below USDA’s 50.9 but above the 2022 yield of 49.5.
PRO FARMER OR USDA?
For the past four years, Pro Farmer’s corn yield has correctly informed on the direction of USDA’s corn yield from August to September, but it had the wrong lean in the two prior years (2017 and 2018). For example, Pro Farmer’s 2022 corn yield suggested USDA’s September 2022 forecast should come in below that of August, and it did.
The same stat for soybeans shows Pro Farmer’s yield also offers decent insight on USDA yield direction in September as the last two times it failed was in 2017 and 2015.
Versus final yields, the Pro Farmer bias on USDA’s August corn yield has panned out in 13 of the last 15 years, meaning if Pro Farmer predicted a yield higher than USDA’s August forecast, final yield was also usually higher than in August, and vice versa.
Pro Farmer’s soybean yields have been slightly less helpful in gauging whether final soybean yield is higher or lower than USDA’s August outlook, having missed that direction in five of the last 15 years and offering no direction in two more.
But Pro Farmer is on a hot streak with soybeans, as its yield has been closer by magnitude to the final U.S. yield than USDA’s August estimate for the last three years. In the 15 years before that, Pro Farmer had been closer to the final than USDA’s August figure only four times.
Pro Farmer also has a slight magnitude advantage over USDA’s August corn estimates, landing closer to the final in three of the last five years, and in eight of the last 15.
This could mean that Pro Farmer’s 172 and 49.7 are closer to the reality than USDA’s 175.1 and 50.9, but enough uncertainty exists, especially as there are no obvious connections among the years where Pro Farmer’s forecasts proved better. Karen Braun is a market analyst for Reuters. Views expressed above are her own. (Reporting by Karen Braun Editing by Matthew Lewis)
