The United States Department of Agriculture released their first crop condition report for corn.  It showed that 57% of the crop is rated good and 8% is rated excellent. The above normal rainfall that has fallen has prevented better conditions from materializing. A total of 65% good to excellent is on the lower end compared to the past few decades (bottom tercile).

Crop Conditions and Yields

So how important is this initial crop condition rating? We took a look at how U.S. yields fared when initial crop conditions were below normal.  The chart below shows the percent of crop good to excellent in the first report (most of the years, it was released in the last week of May).  The black numbers on top of each year indicate the yield departure (%) from trend.

Corn, condition, usda, yield, us

Historically, 7 out of 21 (33%) years had yields below trend (negative numerical values).  However, lets isolate that percentage down to include the crop conditions.  There were 7 years that had corn conditions at 65% G/E or below (not identical to the 7 below normal yield years).  Of those 7 years, 5 of them had yield departures below trend, thus increasing the current chance of below normal years to 71%.  Although it may be a decent indicator, it is not foolproof.  Despite having great conditions to start the year, the worst yield departure year in this range is 2012.

On top of the poor conditions, the report also mentioned that only 91% of corn had been planted.  This compares to the 93% average for the 2011-2016 period.  Corn needs to be planted soon or farmers will not be able to purchase crop insurance.