The US corn crop could join an elite club on Friday -Braun
Repeats column first published on Wednesday. The opinions expressed here are those of the author, a market analyst for Reuters.
By Karen Braun
NAPERVILLE, Illinois, Nov 6 (Reuters) -It is all but certain that U.S. corn producers churned out a new record yield in 2024, but this year’s crop could hit yet another milestone that has not been seen in 20 years.
The U.S. Department of Agriculture on Friday will publish fresh estimates for the 2024 U.S. corn and soybean harvests, and on average, analysts see corn yield dropping to 183.7 bushels per acre from 183.8 in October.
But nearly 40% of the polled analysts think corn yield could come in above 183.8 bpa. If it does, the 2024 crop will join ranks with 2004 and 1994, the last two times that U.S. corn yield estimates rose in every month from August to November.
Long-time market watchers are well acquainted with 1994 and 2004, two “unicorn” seasons where ideal weather boosted corn yield significantly above prior records. Final yields rose 14% and 11%, respectively, above USDA’s trendline yields.
Despite a drier August, the 2024 U.S. corn crop enjoyed a wet July and near-normal temperatures, though distinctly cool weather during July and August is what often separates great crops from truly exceptional ones.
Yield at 183.8 bpa is 1.5% above USDA’s 2024 trendline, not exactly mimicking the stellar 1994 and 2004 results. But it would be the first time since 2018 that final corn yield exceeds trendline, somewhat validating USDA’s lofty trend calculations of recent years.
A 183.8 bpa would also be nearly 4% above the previous national record. The last three times corn yield was 4% or more above the prior high were 1994, 2004 and 2014, perhaps implying something special about years ending in four.
While it will be a long wait for 2034, advances in seed technology and management strategies have set up for yield successes even amid imperfect weather, and many U.S. producers are as confident as ever in their ability to produce strong corn yields.
DOWNSIDE SOYBEAN RISK?
Recent history suggests a November soybean yield surprise could manifest in an unexpectedly low number. USDA’s U.S. soybean yield estimate has fallen below the range of trade estimates in three of the last six Novembers (2021, 2020, 2018).
On average, analysts peg soy yield at a record 52.8 bpa ahead of Friday’s report, down from 53.1 in October. The 1.7-bpa estimate range is typical and includes a low end of 52.1, just above the 51.9-bpa record from 2016.
The 2018 case is interesting because yield fell to 52.1 in November from 53.1 in October, though the trade had been looking for 52.9. That was despite a favorably wet August, unlike this year, which featured the Midwest’s driest August in 11 years.
Commodity brokerage StoneX on Monday reduced its soy yield forecast to 52.6 bpa from 53.5 last month, perhaps a 2018-like feel.
Final 2018 yield ended much lower at 50.6 bpa, and something similar would need to happen this year to have a shot at generating a bullish storyline for soybeans, especially with U.S. stockpiles pushing six-year highs.
Karen Braun is a market analyst for Reuters. Views expressed above are her own.
Graphic- July-August weather in the U.S. Midwest: 1981-2024 https://tmsnrt.rs/4hzwxsN
Writing by Karen Braun
Editing by Matthew Lewis
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