Market Perspectives – August 22, 2024

Chicago Board of Trade Market News

Outlook

Crop tours are often done in the U.S. Midwest by various organizations and market advisory services. One crop tour that is well-known is the Pro Farmer Crop Tour. This tour features multiple scouting groups that run pre-set routes that are generally consistent year-to-year so that results from the tour are comparable year-to-year. There are groups that start in the eastern Midwest (Ohio) and run through Indiana and Illinois and groups that start in the western Cornbelt (South Dakota and Nebraska) and go through Minnesota and Iowa. Typically, all of the groups will end up at a common meeting point, which this year is in Rochester, Minnesota. The tour this year is being conducted August 19-August 22. Pro Farmer has been conducting the Midwest Crop Tour since 1993. Early tours focused on Illinois, Indiana, Iowa, Minnesota and Ohio, with Nebraska and South Dakota added in 1998. Together, the seven states that make up the tour account for about 70% of our nation’s corn and soybean production.

Day 1 of the Pro Farmers Crop Tour reported results from Ohio and South Dakota. The Ohio corn yield estimate was 183.3 bu/ac, down 0.6 bu/ac from last year but 2.2 bu/ac above the 3-year average for Ohio. USDA-NASS forecast Ohio’s corn yield in the August crop report at 188 bu/ac, down 10 bu/ac from the 2023 yield. The South Dakota corn yield reported by the crop tour was 156.5 bu/ac, down 0.9 bu/ac from 2023 but higher than the 3-year tour average of 142.4 bu/ac.  USDA’s current forecast of the 2024 corn yield in South Dakota is 162 bu/ac, up 10 bu/ac from last year.

After Day 2, the Pro Farmer Crop Tour reported a Nebraska corn yield of 173.25 bu/ac which is up 3.6% from last year. Ear counts were lower than last year, but kernel counts per ear are up. The 2024 Nebraska corn yield estimate is up nearly 4 bu/ac from the 3-year average for Nebraska. USDA-NASS forecasts that Nebraska would harvest a record corn yield of 194 bu/ac, up 6.6% from last year. For Indiana, the crop tour reported a corn yield of 187.5 bu/ac, up 6.6 bu/ac from last year and 3.5 bu/ac higher than the tour 3-year average. USDA’s current corn yield estimate for Indiana is 207 bu/ac which is up 4 bu/ac from last year.

Day 3 of the Pro Farmer Crop Tour confirmed a large Illinois corn yield is on the way. The tour reported an Illinois yield of 201.1 bu/ac which is 10.4 bu/ac higher than last year’s yield. USDA’s latest estimate for Illinois is 225 bu/ac, up 19 bu/ac from 2023. The tour scouts reported more variability in Illinois corn yields than they expected and doubted that Illinois would actually achieve USDA’s 225 bu/ac estimate.

The western corn tour scouted 3 crop reporting districts in western Iowa. Those three districts averaged 188 bu/ac, up 9.7 bu/ac from last year’s tour results. The estimate for the state of Iowa will be released Thursday night as will the results for Minnesota.

The Pro Farmer Crop Tour does not estimate soybean yields but does collect data on pod counts in a 3-foot by 3-foot area. In South Dakota pod counts were 1.27% higher than last year; Ohio pod counts down 1.84% from last year; Indiana pod counts were up 7.6% from last year; Nebraska pod counts are up 1.03% from last year; Illinois pod counts are up 11.7% from last year; and western Iowa pod counts are up 8.7% compared to last year’s tour results.

The labor dispute and stoppage at two Canadian rail systems is likely to cause some disruptions to grain flows, especially spring and durum wheat and canola, from Canada and the Northern Plains states to export markets and to U.S. processors. Disruptions to fertilizer movement, especially potash, are also likely.