U.S. Midwest Corn & Soybean Yield Trends

The 2021 U.S. Midwest Crops Can Not Afford A Production Hiccup!

Since the summer of 2020, grain prices have been moving only one way- UP! Although there were some price corrections in the summer of 2021, the factors that sparked the grains’ bull run for the past year or so remain intact with tighter U.S. & global crop balance-sheets. The Western and Southern Plains of the U.S. have been dealing with extreme drought, and the Northern Plains (SD, ND, MN, WI and MI) region is experiencing the worst stretch of dry weather ever. The drought in North Dakota is worse than the 1930s’ dryness. The % of normal precipitation for many regions in the Midwest are generally been lower than normal.

Last 90 Days Percent of Normal Precipitation, Valid on: July 27, 2021

The U.S. drought monitor has been around for more than 2 decades, and we have only seen 4 springs where we have seen more than 40% drought coverage in the lower 48 states, according to the USDA. Over 60% of the U.S. is seeing a drought with the South West and West as “ground” zero. We are not likely to add bushels!

The U.S. Western Corn Belt still struggles with soil moisture concerns despite recent rains. In North Dakota, the topsoil is currently 87% short-very short as of July 25, 2021 vs. the prior week at 86%, South Dakota 82% short-very short vs. prior week at 84%, Minnesota 81% short-very short vs. prior week at 78%, & Iowa 53% short-very short vs. prior week at 33%.

USDA Crop Progress as of July 25, 2021

64% of the U.S. Corn crop is rated G-E, down -1% wk/wk, while P-VP was pegged at 10%, up +1% wk/wk. This compares to 72% G-E and 7% P-VP this time last year. Iowa (-3%), Minnesota (-4%), and Kansas (-5%) were among the notable wk/wk decliners.

Soybean conditions also declined to 58% G-E and 12% P-VP from 60% G-E and 11% P-VP last week. This compares to last year's ratings on this date of 72% G-E and 6% P-VP. P-VP for ND, SD and MN is 41%, 26% and 20% respectively and contain 23.5% of the forecasted harvested bean area.

U.S. Midwest Weather Update as of July 27, 2021

The U.S. Climate Prediction Centre is forecasting a warmer than usual July and August for the northern plains, and parts of the Midwest. 6-10 & 8-14 day NOAA outlook maps transitioned from 'universally warm and dry' across the country last week to just warm and dry West of the Mississippi. But the only constant is that this weather forecast can flip-flop more as we go into August? As of now, IL, IN, MI, and OH are looking good while the Dakotas and Minnesota will continue to see wide zones of crop stress and yield loss. The wild cards are Iowa, Wisconsin, and Missouri (which received too much rain?).

NOAA’s latest drought monitor out for summer/early-fall 2021 projects that the U.S. Northern Plains and significant parts of the Midwest will remain drought stricken, with an expansion in drought.

The drought in the Northern Plains is not just due to the recent dryness (since fall 2020), but it’s been dry for 2 years. NASA analysts opine that 2021 spring was the driest or second driest in a hundred years. 2021 is a crop of 2 tales, crops grown above the frostline or Hwy I-80 and those grown below.

The 60-day U.S. rainfall map shows that normal rainfall in North Dakota did not make a dent in its drought condition. The real test will be during the rest of July and August, which could be a “game changer.”

Only 6 of the last 21 years has 60% of the US been in some level of a drought. This year is one of them.