There are relatively high drought situations around the Midwest and High Plains cropping regions. However, the expectations for corn yield are only down 1.2 bushels from last year, at 169.5 bushels per acre, on a national average. Additionally, the 2017 yield estimates are still greater than trade expectations. Soybean yield expectations are 49.4 bushels per acre, 1.4 bushels above the national trend despite the drought conditions. What these conditions point to is what some call “a perfect storm” for those affected by the drought. There are drought conditions but they are not widespread enough to cause prices to increase. So, for those farmers in drought areas which will have significant decreases in yield; prices will not make up the difference.
Excellent corn and soybean growing conditions in the southern and eastern seaboard areas of the US are offsetting some of the yield stress being seen in the Dakotas, Nebraska and parts of Iowa. The yield maps of the August crop report show where record yields are being seen and where less than robust yields are expected.
Corn price expectations from the USDA held at $3.30 per bushel (no change from last month), while the price range for soybeans tightened with a midpoint price of $9.30 per bushel (down $0.10 from last month).
Preston Lyman is a Research Analyst with Decision Innovation Solutions (DIS). DIS is an Iowa-Based economic research firm which provides regular farm economics research and analysis to the Iowa Farm Bureau staff and members.