AiQ Corn (Final) and Soybean Yields Prior to the September USDA Update
AiQ forecasts final corn yields at 183.3 bu/ac based on 83.4 million acres for 15.29 billion bushels. AiQ lowers soybean yields to 52.6; final yields will be released later this month.
The I-States are going to be big... AiQ quantifies the USDA's August Optimism
Here are some high-level comments on the model outputs:
Experts are generally 2 - 4 weeks behind on realized weather. Weather in the USA improved from early July until around August 20. This stabilized several areas that had experienced an extremely hot, dry June and the first half of July in the eastern corn belt.
Soybeans will be the bigger wildcard for several reasons: late planting in core production areas (Iowa, Minnesota, etc.) made modeling more variable state-by-state. Satellite data will be less reliable than in other years. Pod-filling weather from August 20 onwards was dry for much of the central and western corn belt. This came after ProFarmer anchored record expectations.
Corn Comments:
I-States were temperate and max daily highs were hot on the east coast
Two regions of variance will be the I-States, Illinois in particular, and the East Coast through Southeast. While “experts” will point out that these periphery states account for less than 5% of the total area, the USDA’s August reduction was statistically significant relative to weather that normalized in July and August.
If Illinois is 225 (or even close), the national yield has upside from our forecast. The USDA’s August I-State increases contributed 3.4 bu/ac to the national average from a typical good season.
The East and Southeast were .8 bu/ac lower than a typical year with subpar weather. The East Coast was hot, but rains normalized in many areas after the second week of July.
Below is a chart of Precipitation during the corn growing season in Virginia. We chose Virginia because the USDA’s August update cut production by 35%. These states projected losses of 11% to 35%.
Rains normalizing suggests the USDA may have overdone yield cuts in August
Most traders and analysts got bearish on corn yields following ProFarmer’s lower numbers, but this coincided with futures rallying off an oversold market. AiQ points out that most market sentiment trails weather pattern shifts by 2 to 4 weeks. Corn made its low close on August 26. AiQ added some demand comments at the bottom.
Anyone interested in by-state final corn yield numbers or access to weather
data and model outputs, please get in touch with us here.
Soybean Comments:
State-by-state weather conditions for the soybean growing season
Soybean weather was good this year, especially in the central and northern corn belt. Here is AiQ’s proprietary ranking for total growing conditions. This numerically quantifies weather, satellite data, and other factors to answer a simple question. Was it a good season for soybeans?
This year’s finishing weather is the big question mark. The ProFarmer numbers were released the week of August 19 - 23. This was when much of the US Central and Western corn belt turned dry.
Aug 20 - Sep 10 IL/IN/IA averaged 35% and 50% of normal precipitation
AIQ’s main deviations from the USDA are again the I-States. The USDA August figures improve the national yield by between .6 and .8 bu/ac nationally from a typical good weather year. If the poor late August first-half September weather is reflected, AiQ expects a small reduction in these states of 2-3 bu/ac.
Here are the expectations for Thursday’s update.
September WASDE Estimates are higher soybeans and lower corn.
Circling back to Demand as Derivatives of Weather and Production:
Two points to drive home:
First, analysts charge five to six-figure sums to suggest next year’s balance sheets will look like this. This is fine for business planning, but this is a horrible way to make short to mid-term decisions around risk management, covering cash needs, trading, or crop marketing.
This can only assume normal to above average weather
Second, AiQ prepared this slide for several US companies in late May to highlight the following:
Corn demand from the USA will be better than expected; it is not China-dependent.
Weather-driven production problems around the globe for wheat, grains, and sugar (read ethanol) drive the improved demand outlook.
Experts differ on what is driving the expansion of corn yields.
A 190-yield is NOT a one-in-five chance. “Integrating data this way,” tells a popular social media story when prices are falling.
Get production right and demand falls into place
About ArchaiQ:
AiQ’s methodology involves taking all applicable weather, production, and satellite data, applying the latest machine learning and statistical analysis, and forecasting production by crop, state, and country.
Once the computing is complete, AiQ’s experts and contributors provide feedback to ensure the power of artificial intelligence is optimized. Asking Grok or ChatGPT even the simplest questions can result in wildly inaccurate results. AiQ combines the latest technology with human expertise.
Register your email at ArchaiQ’s website for free weekly global production updates. Each week, AiQ provides weather updates like the one below to explain the latest weather risks and trends every trader and farmer needs to be aware of.
AiQ provides great info in formats that humans want to consume.
ArchaiQ (AiQ) is a partner of Easy Newz. This is not trading or investment advice. Trading Futures is high-risk; please consult with a professional. AiQ receives input from partners and experts worldwide, whose opinions may be reflected in the figures above.
