Dry weather concerns for US corn yield, but repeat of 2012 unlikely: Maxar

Weather conditions are likely to remain unfavorable for corn crops in the key producing states of the US as they enter the crucial stage of pollination in the next few days, which could hurt yields, but any dramatic decline in yields is unlikely at this point, according to Kyle Tapley, senior agricultural meteorologist with Colorado-based private weather service Maxar.

Owing to the dryness, yield estimates for US corn are likely to fall below the trend line, Tapley told S&P Global Commodity Insights in an interview.
As corn crops in the major corn-producing regions of the US including the Midwest enter pollination, they are very sensitive to heat stress at present, and excess heat can bring down the yield.

For the next 10–15-day period, the forecast is for below-normal rainfall and drier weather across the central US, Tapley said.

Inclement weather conditions delayed US corn planting earlier this season, raising concerns over yields, so weather in the US is pivotal right now to determine yields amid disruption in supply from Ukraine, another major supplier of corn.

At the moment, US corn conditions remain below the 1992-2021 average, and rank 8th worst for this week since 1992, according to Maxar.

The weather forecast indicates that the western corn belt region — which includes Nebraska, western Iowa and North Dakota — may be susceptible to prolonged dryness, he said.

The western parts are expected to face more dryness issues than the eastern part of the corn and soybean belt, Tapley said.

“If [the weather] stays as dry as it is looking until the end of the month, I think we would have some issues, and if it extends into August, probably the impact would be larger,” he said. “The longer [the dryness] lasts, the larger [the impact] it would have on yields.”

But despite the current weather outlook, US corn farmers may not run into adverse conditions similar to those of 2012 when the US corn crop fell sharply due to dry weather conditions.

“If we see the dryness extending beyond the next 10-15 days, then we can see yields going below what our current forecast is — or if we see the temperatures getting a little bit hotter than what we are currently predicting that’s where we can see significant yield declines — but even at that point I don’t think we are going to see something like we saw in 2012 because we did not have the prolonged dryness earlier in the season that we saw in 2012,” he said.

As of now, Maxar is forecasting the US corn yield at 176.2 bu/acre in the 2022-23 marketing year and production at 14.4 billion bushels (365.77 million mt), while the soybean yield is forecast at 51.5 bu/acre and output at 4.5 billion bushels.

Corn production in the US in MY 2022-23 (September-August) is already forecast to decline year on year due to a smaller acreage and below-normal trend yield estimate by the US Department of Agriculture.

The USDA currently sees the US corn yield at 177 bu/acre and production at 14.5 billion bushels, it said in its July World Agriculture Supply and Demand Estimate.

Tapley said recent rains in the US came as a big relief for corn and soybean crops.

“If one just looks at the forecast without the context of what happened recently, then one would be very concerned [about yield declines], but the fact that crops received some rains over the past week does give some relief,” he said.

In the longer term, the weather forecast also suggests drier conditions, said Tapley.

“When we get to September, that’s past the point where dryness would be an issue for the corn crop, but we are showing drier conditions,” he said.

“As we move to October, we are showing below-normal precipitation and drier conditions as well, but that’s when the harvest begins so actually drier conditions would be good,” he said.

“One of the reasons for the hot and dry forecast for the western corn belt this year is La Nina,” said Tapley. “There is typically a 3%-4% decline in the yields of corn and soybeans crops in the US during the La Nina year, generally driven by heat and dryness,” he said.

Moreover, the presence of La Nina tends to increase hurricane activity in the Atlantic basin. Last year, grain exports at Gulf ports in the US were severely disrupted for almost two months as elevators suffered damages due to the hurricane.

“We expect above-normal hurricane activity in the Atlantic Ocean this year because of La Nina,” Tapley said.

However, it is too early to predict the impact and intensity of those storms, he said.

Usually, crop supplies begin to decline from South America towards the end of the year and the US is the largest supplier of corn. If there is any disruption at the port due to bad weather, it could further tighten the supply of corn in the short term.

With corn production in the US expected to be lower than last year amid supply disruptions in Ukraine, markets are very sensitive to any yield changes and supply disruptions.

Tags: crops, yields, forecast, dryness, unfavorable, weather conditions, corn, planting, soybean, US