Gro expects the USDA will take the unusual step of cutting its corn yield estimate when it releases the July WASDE report on Monday because of ongoing drought conditions in Western Corn Belt states.
The USDA has made similar yield cuts this early in the season only three times in the past 20 years, when growing conditions were dry and hot like this year. The 2005 July WASDE cut 3 bushels/acre, and the 2008 report cut 0.5 bu/acre. In 2012, a major drought year, the USDA cut a huge 20 bu/acre in that year’s July WASDE.
Gro’s Drought Index has been flashing worrying signals starting in late 2020 about persistent dryness in North Dakota, with dry conditions later spreading to South Dakota, Minnesota, and parts of Iowa. Although Gro doesn’t expect a USDA yield cut of the same magnitude of 2012, when dryness and heat lingered over the Central and Eastern Corn Belt, we do expect yields to be hurt by this year’s drought.
While the USDA’s current corn yield forecast is for a record 179.5 bu/acre, Gro’s Corn Yield Forecast Model is projecting a lower number. The Gro model, which updates daily, uses spatially explicit weather, vegetation health, and soil data, to monitor environmental and crop conditions during the growing season to continuously forecast final yield.
The US corn crop is under pressure to outperform this year because stocks have been drawn down by increased demand and a weak Brazilian crop. Brazil's statistics agency, CONAB, recently lowered Brazil's corn crop estimate to 93.4 million tonnes from 96.4 million tonnes, but Gro’s Brazil Corn Yield Forecast Model suggests an even steeper cut. Meanwhile, US ethanol production reached a 1½-year high last week, and Gro has long suggested the USDA will need to revise higher its overall corn demand projections.
Close monitoring of Gro’s US Corn and Soybean Yield Forecast Models is necessary to gauge crop availability and, therefore, crop prices. In a year of high price volatility, Gro analytics and forecast models offer unique and accurate decision-making tools for your specific needs.
This insight was powered by the Gro platform, which enables better and faster decisions about factors affecting the entire global agricultural ecosystem. Gro organizes over 40,000 datasets from sources around the world into a unified ontology, which allows users to derive valuable insights such as this one. You can explore the data available on Gro with a free account, or please get in touch if you would like to learn more about a specific crop, region, or business issue.