One of the biggest factors for prices going into this years growing season will be the weather. Does the weather during the heart of our growing season allow for trendline yields? Above? Or below? The long-term yield is shown in the red line. The narrow red lines are 5 bu above or below trendline yield. Anything within 5 bpa of a trendline yield would be considered somewhat of a typical season. On occasion we can produce yields that are 5 bu above or when weather is threatening we can produces yields that are well below 5 bpa. USDA’s Ag Outlook forum is shown in yellow and is estimating a trendline yield of 179.5 bpa fore a national yield this year. If we do produce a 179.5 bpa yield that would be an all-time record for the U.S. corn crop.

Yesterday’s USDA crop report showed corn production well below the average trade guess. In fact, a record amount of production below what the trade was expecting. In fact, yesterday’s miss of nearly 300 mb vs the average trade guess is over 100 mb larger than any previous errors based on trade expectations over the past 30 years. This is the type of production loss that the U.S. markets can’t afford and that is why corn prices are limit up yesterday and we saw some additional follow through to the upside today.

For the U.S. corn yield the trade is expecting the yield to be down from the December report. The same is true for beans. The trade is looking for U.S. production to be down for both corn and beans.

In both Brazil and Argentina, the trade estimate is lower than USDA’s estimate for both corn and soybeans. If the trade is correct that would lower the amount of exports out of South America which could mean additional exports out of the U.S.

In Argentina, the heart of their production is consolidated into Cordoba, southern Santa Fe, and northern Buenos Aires. These three states produce nearly 80% of the soybeans in Argentina. The weather in the center of Argentina is the heart of their growing region and that’s the area the needs to be monitored as we head towards Dec and Jan, the heart of the their growing season.

The center-west area, Mato Grosso, is the number one producer of soybeans in Brazil producing 27% of Brazil’s crop over the past few years. Extreme southern Brazil, Parana, Rio Grande do Sul, and Santa Canatrina produces over a third of the Brazilian crop.

The corn yield came in at 175.8 bpa well below the average trade guess. The soybean yield at 50.7 bpa was also below the trades estimate. Corn and soybean bushels were both well below the average trade guess and down from last month.