NASS’s August corn yield estimate was higher than all of the trade guesses, and many in the market now question NASS’s use of the third highest ear weight on record? However, NASS can only guess at ear weight. A 10-state ear weight of .348# was obtained via NASS’s model, and it will be fine-tuned as more objective data is gathered. However, ARC does mention that NASS at the very end of its report on Thursday revealed that ear counts were the fifth highest on record – or, stated another way, ear counts were the lowest in five years at 28,1000 per acre. This is significant, and suggests a near record ear weight is required to maintain a national yield of 169 or better. A host of weather and yield data suggests this is simply too high. Note that crop-finishing weather will be rather dry across IA, IL, WI and IN.
The table above presents national US corn yield as a function of ear counts (which are known), various ear weight scenarios and the 10-state average yield, which not surprisingly correlates strongly with national yield.
The most likely scenarios, which account for July temps and use weather much less ideal than last year, point toward a final US corn yield of 161-164.5 Bu/acre, and so it’s just tough to adjust AgResource’s corn yield forecast upwards. We also mention that there’s a strong tendency for ear count numbers to decline from August to final, which places yet more burden on ear weight.
There’s consensus that US corn yield will be lowered in the Sep and/or Oct reports, but the degree of change will be debated. NASS’s yield is never perfectly accurate in August as the survey is heavily weighted to farmer surveys. From Aug to NASS’s final release in January, it’s rare for corn yield to fall by more than 4-6 Bu/Acre, though there have been a handful of years that yield was reduced by 10-15 Bu. ARC doubts changes this year will be that dramatic, but we do maintain a probable final yield in a range of 164-166 Bu/acre. This would strip another 300-400 Mil Bu from US corn supply and end stocks. Potential changes from Aug to final are at left, and even a 161 BPA does fit within the historical range on a percentage basis. In soy, the yield change can even more robust as the August estimate is really just a beauty contest.
The point is that August is just the start of NASS’s yield determination process. August NASS estimates will likely mark the highs of the year.