Yield Model Commentary Archive

Archive of our weekly commentary on our US corn yield model forecast

15 July 2017

Breaking a four-week trend, Gro’s US corn yield model estimate has fallen from 162.42 bushels/acre (or 10.19 tonnes/hectare) to 159.99 (or 10.04). We have begun to release yield estimates on a daily basis as new data comes in.  Since changes will be much more incremental as a result, we will only provide commentary when events justify it.

Gro's 2017 US Corn Yield Forecast Falls

Both subpar satellite-based vegetation health numbers (NDVI) and declining condition ratings have combined to reduce our estimate this week, which is clearly still below the industry’s collective opinion and trend yield. If we end up with only 159.99 bushels/acre in US corn this year, corn prices should be significantly higher.

Crop_Conditions_Declined
07 July 2017

[UPDATE]

On Thursday, July 13, at 4pm EDT, we will be hosting our final yield model webinar. Our Lead Data Scientist and Head of Strategy will be speaking about some of the more technical details in the model. You will also have a chance to ask any questions you may have. You may register for it here.

We hope to see you there! 

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Gro's 2017 US Corn Yield Forecast Continues to Rise

For the fourth week in a row, Gro’s corn yield model estimate has risen, from 160.47 bushels/acre (or 10.07 tonnes/hectare) to 162.42 (or 10.19), another almost-2-bushel/acre rise. The primary drivers of the rise appear to have been increased crop health detected from satellite based vegetation signals and simultaneously rising USDA crop condition scores. The model is still below USDA and trade estimates and therefore can still be seen as bullish for corn prices.

2017 US Corn Conditions Improve
29 June 2017
Gro's 2017 US Corn Yield Forecast Trends Up

Gro’s US corn yield estimate has risen again, from 157.51 bushels/acre (or 9.89 tonnes/hectare) to 160.47 (or 10.07), a significant increase of almost 3 bushels/acre. Geospatially-derived NDVI data has driven the change, coupled with improving condition ratings. We’re concerned about unusually high proportions of “very poor”- and “poor”-rated fields in Indiana and the Dakotas, but so far they have not outweighed the better rated crops elsewhere.

High Proportions of Poor and Very Poor Corn in Indiana and the Dakotas
22 June 2017
Gro's 2017 US Corn Yield Forecast Inches Higher

Once again, Gro’s US corn yield estimate has risen, from 156.74 bushels/acre (or 9.84 tonnes/hectare) to 157.51 (or 9.89). Better crop conditions in Iowa, Illinois, and Indiana drove the change in the number, but we’re also starting to see significant effects from NDVI as the crop matures. Despite the increases of the past two weeks, at 157.51, our model result still comes in well below market yield expectations and therefore would contribute to a forecast for higher corn prices.

2017 Crop Conditions Improve in Iowa, Illinois, and Indiana
13 June 2017
Gro's 2017 US Corn Yield Forecast Rises Slightly

We’re a little relieved to see the model yield rising from 154.79 bushels/acre (or 9.72 tonnes/hectare) to a still-alarming 156.74 (or 9.84), an increase of almost 2 bushels/acre. Of course, this is still well below trend and consensus forecast yields, and if realized would be hugely bullish for corn. The late-May increase in land surface temperatures visible in the chart below explains most of the move in the model, which occurred despite percent good-to-excellent deteriorating by 1 point in Monday’s Crop Progress report. Since we also see in that report that 95 percent of the US corn crop has emerged from the soil, we expect to start getting real value from greenness indicators like NDVI.

Rising Temperatures Help the Corn Crop
05 June 2017
Gro's 2017 US Corn Yield Forecast Falls Further Below Trend

Our model value has crashed to 154.79 bushels/acre (or 9.72 tonnes/hectare) from 162.57 bushels/acre (or 10.20 tonnes/hectare). There are two big factors at work here: the lower-than expected corn crop conditions estimate in USDA's Crop Progress reports so far and colder than normal temperatures in late May causing a big drop in forecast Indiana/Eastern Corn Belt yields.

2017 US Corn Conditions Far Worse Than Previous Years

As data has accumulated, our confidence in a lower-than-expected yield has grown. Corn plants are emerging in the Midwest and satellite-based normalized difference vegetation index (NDVI) information will soon begin to influence the model and increase its accuracy. At this early date, we acknowledge that the margin of error for this estimate remains large, but if our estimate remains in the 150s into late June, a below-trend yield is very likely.

Average Error in Gro's Yield Model Backtesting During the Season
01 June 2017

UPDATE:

On Monday, the USDA released the first crop progress report of 2017 that included corn conditions. It was a surprise on the low side: good-to-excellent rated corn was only 65% of the crop versus 72% last year at this time.

Gro's US corn yield model has been warning of this for weeks, and indeed our latest update was sent just prior to the release of the report. Price gains since the report have been significant.

28 May 2017
Gro's 2017 US Corn Yield Forecast Remains Below Trend

This week, we see another wild swing in the yield model, clearly caused by an extreme change in average temperatures across the US Midwest. The value has fallen from 168.60 bushels/acre (or 10.59 tonnes/hectare) to 162.57 bushels/acre (or 10.20 tonnes/hectare), which is only slightly above the alarming initial value in early May. It’s important to remember that early in the season, the model has less data and therefore can fluctuate dramatically with changing conditions. But with recorded temperatures this far below average across a wide geographic area, the US corn crop needs seasonal warming to occur soon to reach its yield potential.

Land Surface Temperatures Drop in Late May
20 May 2017

The yield model value has risen from 167.85 to 168.60 bushels/acre, and appears to be converging to trend, which is currently at 169.46. The forecast has gotten much less bullish for corn in the past two weeks, largely due to a land-surface temperature catch-up that’s still taking place. As expected, the week-to-week variation looks more stable since more data came in. Note that the model yield is still bullish, since it’s below the trend and below the trade estimate/guess at 170 bushels/acre.

Gro Corn Yield Model on 20 May
12 May 2017

Gro’s yield model has updated from 162.46 to 167.85 bushels/acre in its second run of the 2017 corn season. The complexity of the modeling process makes it difficult to say exactly which factors caused the change, but we believe that rising land surface temperatures helped to boost model yield. Although 5.39 bushels/acre is quite a big increase for one week, 167.85 is still significantly below trend and last year’s yield. It remains bullish on corn prices relative to current expectations.

We don’t expect variation of this magnitude as the season goes on. Sensitivity to initial conditions is a common feature of complex models, and we are still close to the start of the season.

Rising Land Surface Temperatures in the US Corn Belt
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