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Lower yields expected for May WASDE, are they right??

Lower yields expected for May WASDE, are they right??

May 10, 2019 | |

Look for the full report in the IAG Interactive Masters

On Friday, May 10th the World Board (WAOB) will publish the first corn and soybean balance sheets for the 2019/2020 crop year. Based on the weather model employed by the USDA, I estimate the initial USDA yield for corn will be around 173 bushels per acre, 3 bushels per acre (bpa) below the trendline yield of 176. The model calls for a reduction of around 2.89 bpa for every 10% the US planting progress lags the average on 5/15. The average planting pace for May 15th in their model is near 80%. Some interpolation/extrapolation will be required. Our analog year is 2013. Planting progress went from 28 to 71% complete from May 12th to the 19th. The corn yield in the May 2013 WASDE was 158, 5.6 bpa below the trendline of 163.6 published at the 2013 USDA Forum. The Westcott‐Jewison model is used for guidance on WASDE yields for May – August reports. The surveyed yields will not begin until September this year. The yield adjustment will likely keep USDA 19/20 corn end stocks around 2.1 billion bushels. The lower yield estimate will keep balance sheets artificially low this summer.

USDA data for the yield model goes back to 1988. Our data tells us that yield has been less impacted by planting dates over the last 20 years. In my opinion, there are two possible causes: 1. June/July precipitation has been above normal the last 5 years, maybe masking the yield impact of late planting, or 2. What I think is the more plausible answer, prior to the most recent decade late planting meant poorer stands leading to lower yields. Plant population has been consistent the last 10 years even in years of poorer planting conditions. Consistent stands can be attributed to better seed and seed treatments, but also better planting equipment allowing us to achieve optimal stands even in less than optimal soil conditions. We are leaving the IAG yield at 177, a simple 20‐year trend which adjusts the 2012 yield to trend. IAG US 19/20 end stocks estimate is 2.350 billion bushels.

I contend WAOB should look more closely at the impact on soybean yields due to late planting or to say lack of early planting. The USDA model does not find soybean planting date as a factor in yield. Soybean planting has been edging earlier and earlier every year, and recent farmer plots have verified the yield benefit. Early planting has also been aided by the lack of an economic disincentive – the cost to replant is minimal. Illinois has been a leader in early planting – somewhat due to its geographic advantage. The soybean yield in Illinois last year looks like an outlier. The 2018 Illinois soybean average yield was 65 bpa, 6 better than the past record and 4 better than the record from any other state. 2018 soybean planting in Illinois was completed faster than any year since 2012. Early planting and a relatively warm and moist August combined in Illinois to produce an off the charts yield. Indiana’s record soy yield was also a result of early planting and a favorable August. Other states experienced a favorable August in 2018, but failed to achieve record yields.

IAG will leave soybean yields at the trendline of 50.3, a 20‐year mathematical trend, but I will contend due to lack of early planting, the astronomical yields of 2018 are highly unlikely. IAG end stock estimates for 19/20: US at 1.031 billion bu., World at 116 MMT.

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