Specialists within the sport of chess break the sport into three phases: the opening, the center sport and the tip sport. We will take a look at a crop in the identical manner, with planting season because the opening and harvest as the tip sport. Present crop conditions have me pondering the center sport, and a crop with potential to journey in two totally different instructions.
Each Monday through the rising season, USDA releases a Crop Progress report. This report tracks planting and harvest progress and the general situation of chosen crops in main producing states. Crop conditions are famous by state as p.c very poor, poor, truthful, good, and wonderful. There are alternative ways to view the information, however many analysts prefer to concentrate on the entire proportion that’s rated good or wonderful. As of the second week in July, the 2021 U.S. corn crop is 65% good to wonderful. That is beneath common however not by a lot, as higher scores within the japanese Corn Belt are offering some steadiness to some severe troubles within the northern half of the western Corn Belt.
The accompanying chart reveals corn crop conditions within the second week of July and remaining corn yields. A constructive relationship between good-to-excellent scores and remaining yields are seen however not significantly sturdy. Contemplate, for instance, the distinction between 1995 and 1992. Each years have been rated 66% good-to-excellent within the second week of July. The ultimate yield in 1995 was practically 10% beneath development, whereas the ultimate yield in 1992 was about 10% above development.
(I calculate trend-line yields utilizing easy 30-year regression, which tends to supply modestly conservative estimates of trend-line yield)
Contemplate one other instance. In 1996, the corn crop was rated 61% good-to-excellent within the second week of July. At an identical time three years later, the crop was in significantly better situation, ranking 78% good-to-excellent. Each years delivered a remaining yield very near development.
July makes the corn crop, and that explains why crop conditions within the first half of July will not be a very good predicter of ultimate yields. You is likely to be questioning, “Why the focus on corn – what about soybean conditions and yield?” As a result of August makes the soybean crop. There could be no higher instance of this than 2003, when a dry August delivered the bottom soybean yields over a decade whereas corn yields set a nationwide file.
There are personal analysts who’ve developed elaborate yield projection fashions primarily based on the information gathered within the weekly Crop Progress report. When the tip sport is on (aka harvest is weeks away), they are often surprisingly correct. Nonetheless, the second week of July just isn’t the tip sport. That is the center sport.