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Rising US yield hopes spur scepticism over much-watched crop data

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The usefulness of official US crop condition data came into question as many commentators raised their estimates for corn and soybean yields close to year ago levels, despite weaker Washington ratings.

Analysis group Lanworth flagged the "importance of acknowledging the limitations" of the US Department of Agriculture's weekly crop condition scores, flagging the "need to utilise additional sources of information when generating yield forecasts".

"There is certainly some disconnect going on," a US broker told Agrimoney.com.

"The crop condition data appear to be showing in many cases a different crop to what you are seeing in other reports."

Data divergence

The comments come amid attempts by brokers to reconcile data showing relatively poor condition scores in weekly USDA crop progress reports, of 60% for soybeans and 62% for corn, with elevated official yield estimates for the crops.

The crop ratings are below four-year average of 67% for soybeans, and 69% for corn.

However, the USDA is forecasting a corn yield of 169.5 bushels per acre, behind only the record 174.6 bushels per acre last year, with the soybean figure at 49.4 bushels per acre, again second only to 2016, which saw a 52.1 bushels-per-acre result.

While many commentators have been forecasting more notable drops in yield prospects this year, in line with the figures suggested by the weekly crop condition data, this week has brought a series of upgrades.

Yield upgrades

In corn, a "few more pundits moving closer" to USDA's 169.5 bushels-per-acre yield figure, said Benson Quinn Commodities.

These include Michael Cordonnier, the respected analyst, who this week raised by 1.5 bushels per acre to 165 bushels per acre his estimate for the US corn yield, and by 1.0 bushels per acre to 47.5 bushels per acre his forecast for the soybean result.

Chicago broker Futures International raised its corn yield forecast above 170 bushels per acre, while raising its forecast for the soybean figure to 49.8 bushels per acre.

"Like corn, we believe there is a possibility USDA will increase the soybean yield" in next month's monthly Wasde crop report.

'Seem at odds'

Lanworth – as it on Wednesday nudged its own forecasts for the US corn yield higher to 168.2 bushels per acre, and for the soybean yield to 47.7 bushels per acre – said that this year's USDA yield estimates "seem at odds with expectations" based on the crop condition data.

The group, which is own by Reuters, noted, for instance, that the USDA corn yield estimate for Nebraska, at 183 bushels per acre, was 5 bushels per acre above the year-ago level – yet the state's crop rating, at 63% good or excellent, was down 13 points.

"Similar discrepancies existing in other major producing states, such as Indiana and Ohio."

'Not an ounce of credibility'

At North Dakota-based Halo Commodity Company, Tregg Cronin highlighted volatility within crop condition data, which has seen some large week-on-week moves in state ratings, and subsequent large reversals.

"The rating changes in Colorado this year have been so erratic there can't be an ounce of credibility lent to their numbers," Mr Cronin said.

"One observer pointed out the Illinois corn crop is rated just 4 points better than the North Dakota crop," with good or excellent readings of 54% and 50% respectively.

Yet North Dakota has been suffering weather setbacks of historic proportions, with 82% of the state rated in drought as of last week, compared with just 1.2% of Illinois.

By Mike Verdin

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