Fundamentally Speaking

Will depressed corn crop ratings as of the beginning of July in a number of Eastern Corn Belt states preclude the possibility of achieving anything close to trend yields this year?

Traders are asking that question with the latest USDA crop condition report noting a mere 61% of the Illinois corn crop in good or excellent condition vs. 80% a year ago, 48% in Indiana vs. 75% last year and 45% of the Ohio crop rated as either good or excellent vs. 75% a year ago.

The accompanying graphic shows corn crop conditions as of July 5th since 2000 for the three main Eastern Corn Belt states of Illinois, Indiana and Ohio using our usual ratings system where we weight the crop based on the percent in each category and assign that category a factor of 2 for very poor, 4 for poor, 6 for fair, 8 for good, and 10 for excellent and then sum the results.

Other than the disastrous drought in 2012 these are some of the lower July 5th crop conditions in many years though each of the three states has had even lower crop ratings over the past ten years.

Indiana had a 652 rating as of 7/5/2005 vs. 656 this year yet final IN corn yields that year were 3.9% above trend.

Ohio corn crop ratings on 7/5/07 were 671 vs. 670 this year with the state's corn yield that year 1.2% above trend.

Finally the 7/5/09 Illinois rating was 702 vs. 716 this year with the 2009 final Illinois corn yield coming in 6.4% above trend.

Of course there were other years such as 2002 when beginning of July ratings were depressed and yields that year were quite poor though the summer of 2002 featured quite dry conditions in much of the Eastern Corn Belt.

There is no doubt that what appears to be record June rainfall in IL, IN and OH have impaired normal corn crop development but favorable growing conditions in July and August could still result in respectable yields.

Keep in mind that 2015 yields as much as 10% below 2014 levels would still result in final yields anywhere from 2-10% above each states 10 year average.

(KA)