The USDA’s National Agricultural Statistics Service released its updated corn forecasts at noon EDT today in the latest Crop Production Report. In it they increased the expected corn yield by almost 3 bushels per acre (bpa) from 178.4 to 181.3. As a reminder, AER’s forecast from August 1st was 177 bpa and this compared well with other independent estimates, such as the Pro Farmer Tour. At 181.3 bpa, the September forecast from NASS is within range of what we think is possible for the season, albeit on the more bullish side (Fig. 1; below).
Figure 1. Updated yield curve for 2018. The curve (green line) is based on the final de-trended yields of 15 previous seasons that have had similar conditions to this season. The dashed line represents the yield at trend for 2018 (~171 bpa), the dotted line represents our analog based projection back in February (~173 bpa), the solid black line represents our forecast of 177 bpa from August 1st that was based on conditions to that point plus the forecast for the remainder of the season, and the solid red line represents the current forecast of 181.3 bpa by NASS.
Whether or not I think this forecast is accurate is not the point of this blog, however. The point is to give some historic context on how often an increase in the forecasted yield between the August and September forecast actually translates into 1) a higher yield than the September forecast and 2) a higher yield than the August forecast.
NASS has revised their August projections upward in the September forecast 20 times since 1974. Of those 20 years where the forecast was revised to a higher yield, only 5 of those years (1974, 1990, 2006, 2007, 2014) had a final yield that was lower than the revised projection in September. Along those same lines, only 3 of those years (1974, 2006, 2007) had a final yield that was lower than was projected in August. So looking at it from an historical perspective there is a 75% chance of the final corn yield this season being higher than the September forecast of 181.3 bpa and an 85% chance of the final corn yield being higher than the 178.4 bpa forecast by NASS on August 10th. Time (and the combines) will tell whether or not the revised number is indeed in the right direction.
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