USDA Corn Yield Estimate Still Too High

Young corn plants ( Sonja Begemann )

It’s been a long, arduous planting season for farmers across the U.S. Many farmers are wondering what this will mean for yields, ending stocks and, consequentially, corn prices.

“I think the drop-dead week will be this week for planting,” Michael Cordonnier of Soybean and Corn Advisor, Inc., told AgriTalk Host Chip Flory. “If you plant your corn at this time in June you’ve probably got at least a 20% yield drag. If you go at the end of this week that could go up to 30% or 40%. This is very serious, and we won’t know the yields until later in summer.”

So far, the market isn’t reflecting the tough season.

“USDA’s World Agricultural Supply and Demand Estimate (WASDE) showed us down 3 million corn acres with a harvest estimate of 91.7%,” Cordonnier says. “I think a 90% harvest for grain is optimistic—it might be in the 88% to 89% and then lower yield. When you combine all these things, you’re going to get a much lower production number.”

Cordonnier estimates farmers will finish with 86 million corn acres planted, with 90% harvested for grain and a 165 bu./acre yield—putting total production at 12.8 million bu. His yield estimate is just slightly lower than USDA’s 166 bu./acre estimate.

With lower production and unchanged demand, the market could provide positive pricing opportunities.

“The burdensome corn carryout could be gone by the end of the summer,” Cordonnier says. “We’re going to need price rationing to ration the demand.”

South American farmers will be closely watching U.S. corn production, he notes.

“This is a corn story, primarily, in the U.S.,” says Cordonnier. “So, I do think corn acres will go up in South America, especially Argentina. They’re going to take out some soybeans to put in more corn.”