CHICAGO (Reuters) - The U.S. government’s recent projections of record corn yield and near-record soybean yield – which are bearish for prices - have been met with little market skepticism, for the most part. But scores of industry participants are trekking through Midwestern fields this week just to be sure of the lofty predictions.
U.S. corn and soybean condition scores have been elevated for most of the season and the weather has been more favorable than not. So even though the U.S. Department of Agriculture’s yields of 178.4 bushels per acre for corn and 51.6 bpa for soybeans were at the top end of trade estimates, it was not difficult to see the argument for the higher numbers.
But yields always have the potential for surprise, both to the upside and downside, and this is exactly what the 26th annual Pro Farmer Midwest Crop Tour is trying to determine this week.
The Midwest Crop Tour is among the most widely followed events of this type, due to its size and history - meaning that the results of this tour can influence the market. Scouts this week will take measurements in hundreds of corn and soybean fields across the key U.S. agricultural states of Illinois, Iowa, Nebraska, Minnesota, Indiana, Ohio and South Dakota.
The tour findings help determine the year-to-year trend in the corn and soybean crops and are most meaningful when compared with past tour data, not the government data.
Two of the big things to watch this year will be anecdotal observations of ear weights on corn and the number of soybean pods per plant relative to the last two years.
Anyone who is interested can follow the Twitter hashtag “#pftour18” throughout the day from Monday through Thursday as many scouts tweet in real time from the fields. Midday and nightly updates will also be available from Reuters.
The big story this year for corn is the fast development pace of the crop, which has led many market-watchers to doubt that the ear can put on sufficient weight. When corn reaches maturity too quickly, it may not have enough time to maximize kernel fill, which may lower the yield.
Last year, grain fill was a dark horse. Low crop conditions all year led analysts to make too-conservative guesses on corn yield, but USDA’s August forecast ended up higher than the market consensus. In the end, one of the coolest Augusts on record helped add 7 bushels to the yield from August to the January final.
The tour does not explicitly measure ear weight or kernel density, so the observations will be mostly anecdotal. But scouts will undoubtedly be thinking about this factor from field to field this year and will likely report it on Twitter if they think ears are noticeably lighter than expected.
In each corn field, scouts are measuring row spacing, counting ear populations, measuring grain length on three systematically selected ears, and measuring the number of kernel rows around the ears. These metrics allow scouts to make a rough yield calculation, which essentially assumes a standard ear weight for all fields. (tmsnrt.rs/2L9RmKX) (tmsnrt.rs/2OPWu9i)
This year, the scouts are in luck because tour calculations for corn work best with more mature ears since additional ear growth or tip back – when the kernels do not fill out to the end of the ear – are much less likely.
As of Aug. 12, some 26 percent of U.S. corn had reached the dent stage, the final stage before maturity, well ahead of the five-year average of 13 percent.
It is important to understand that some of the tour’s state yield averages reported at the end of the day may seem drastically off from USDA’s numbers. In Nebraska, Minnesota and South Dakota, deviations between tour and USDA final yields are caused by geographical variance. In Illinois, Iowa, Indiana and Ohio, much smaller variations arise based on how the crop finishes out.
Since 2001, approximately 15.5 bushels per acre on average must be added to the tour’s state corn yield in Nebraska. This is because more than half of the state’s corn is irrigated, but more than half of the tour’s samples are on dry land.
About 11 to 12 bushels per acre must be subtracted from the tour’s Minnesota yield because the routes mostly cover the higher-yielding southern tier. In South Dakota, the tour’s corn yield has on average come in 3.9 bushels per acre too high since 2001 because the routes also feature more of the better farmland in the state.
Soybean yields are difficult to derive strictly from field measurements at this stage because there are too many unknown variables such as the number of pods per plant, the number of beans per pod, and the size of the bean in the pod.
The tour is not estimating soybean yields in each field on a bushels-per-acre basis, but instead the metric is the number of pods in a 3-foot by 3-foot plot.
These pod counts tell you how much of the bean production factory is up and running, with higher counts being more supportive of higher yields.
Last year, pod counts across the seven states were down 5.3 percent from 2016’s levels, and the final national yield landed at 49.1 bpa. On average, scouts across the seven states counted 1,093 pods in a 3-by-3-foot plot in 2017 and 1,154 pods in 2016.
The 2016 yield was a record 52 bpa, and with USDA at 51.6 bpa for 2018, scouts will be trying to determine whether the 2018 crop has record potential. Comparing the observations with the 2016 numbers will be particularly useful. (tmsnrt.rs/2OQTxp4)
Editing by Matthew Lewis