USDA Throws Corn A Curve Ball On Yield Estimates

By Alan Brugler
DTN Contributing Analyst

In a ballgame eerily similar to last year, USDA threw a curve ball at the corn market. But unlike last August when the bulls were able to hit that bearish offering and close higher, this year they clearly swung and missed.
Traders had been expecting a national average corn yield in the 166-bushel-per-acre range, based on crop condition ratings, the drought in the Western Corn Belt and presumed lower plant populations in flooded-out areas back east. While a couple of analysts thought USDA might be as high as 169 bpa, almost nobody thought they would be within 1.2 bushels of a year ago at 169.5 bpa in August. With no change to the expected harvested acres, that put expected production at 14.153 billion bushels, down an even billion from the August 2016 report.
Instead of rallying on the bearish news (last year USDA put out a 175 bpa number when the trade was looking for 171) like they did last year, corn prices were down 0-2 in the count.
How did USDA come up with a much higher U.S. average yield than the trade was expecting? Blame it mostly on different methodology. For August, NASS analysts rely heavily on farmer surveys, with input from ears-per-acre counts in the objective yield plots and satellite sensing data. They have a limited number of grain-weight-per-ear samples from Texas, Florida, Louisiana, et al, but can’t use that for the main production states because the crop isn’t far enough along on starch deposition.
We have to assume that the farmer surveys generally said the crop had strong yield potential if nothing happens to it. The greenness data would clearly show problems in the far Western Corn Belt and the Northern Plains, but it would tend to be greener than normal in the Eastern Corn Belt with its above-average rainfall this year. The crop canopy has closed up many of the bare spots that were seen in earlier maps.
On the trade side, a lot of the expectations are based on crop condition models, tied to historical yields. The better models trend-adjust the historical yields to make the ratings more comparable across decades, but not all do so. The biggest issue is that USDA regards the condition ratings (poor to excellent) as color commentary and does not use them in their own yield models.
Which approach is correct? USDA has the stronger argument in the long run, with 4,544 objective yield plots and 21,654 monthly farmer surveys. That should be more reliable than correlations between subjective ratings and final yields that can be significantly different than those in August.
That said, there are some weaknesses in the August NASS numbers. The most glaring is the lack of actual grain ear weights. Some of the private surveys, including our own Brugler Virtual Corn Tour, are using actual ear lengths, girth, etc. When USDA does dry them down and convert to 56-pound bushels, they will be more accurate. For now, it is possible that the trade might be more accurate if indeed the crop conditions reflect actual influence on ear development and yield potential (and not just a beauty contest).
A second potential weakness is the harvested acreage base. NASS didn’t make any adjustments to harvested acres, despite anecdotal reports of abandonment in the Dakotas and prevented planting claims in the ECB. NASS has that data every week, not just when they blend it into the October crop report. Corn prevented planting claims for Illinois to date are almost one-third fewer than in 2016, while Ohio is almost double. That is a tough trend to decipher.
The market reaction also had a technical component. Both corn and soybean charts were up against plausible short-term resistance from trend lines or moving averages. The corn charts have head-and-shoulders tops in place and have not reached their downside counts. The soybeans had broken below the bottom of descending triangle formations, and again had not reached the counts. They were vulnerable to a sell-off on bearish news, and that is what they got to work with.
None of this says that the final U.S. average yield will be 169.5 bpa. Nor does it suggest that the low price for the year is in place. The market simply said that it had enough respect for USDA’s numbers (and recognition of huge global carryover stocks from last year) to put the commodities on sale.

Cowboys Compete For Bragging Rights While Raising Money For The Children’s Hospital Foundation

Oklahoma City, OK – The Oklahoma Cattlemen’s Association (OCA) and Oklahoma Ford Dealers invite you to attend the 33rd Annual OCA Range Round-Up Aug. 25 and 26 at the Lazy E Arena in Guthrie, Okla. The event will consist of twelve ranch teams consisting of ‘real ranch’ cowboys that compete in 5 different events that mirror many of the activities they do on the ranch.
“The competition is fierce, but the cowboys don’t take home much more than bumps and bragging rights when it’s all said and done,” said Tim Drummond, OCA Range Round-Up Chairman.
OCA Range Round-Up set out on a mission back in 1985 to provide family entertainment, promote beef and raise money for charity.
“2016 marks the 20th consecutive year that the selected charity has been the Children’s Hospital Foundation. In that time, the OCA has donated more than $456,000.00 and formed a strong connection to the charity and its work,” Drummond said.
This year’s completing ranches include: Alfalfa County Land & Cattle, Cherokee, Okla.; Spur Ranch, Vinita, Okla.; Buford Ranches, LLC, Hominy, Okla.; Stuart Ranch, Waurika, Okla.; Drummond Land & Cattle Co., Pawhuska, Okla; Hall Ranch, Comanche, Okla, Daube Cattle Co., Ardmore, Okla.; McCoy Ranch, Ada, Okla.; Beebe Livestock, Ada, Okla.; Kelly Ranch, Marlow, Okla.; Lazy Rafter Slash Ranch, Lenapah, Okla.; Treadwell Land & Cattle Co., Frederick, Okla.; McPhail Land & Cattle, Snyder, Okla.; Whitemire Ranch, Delaware, Okla.; and Stierwalt Ranch & Cattle Co., Shidler, Okla.
“We like to call the event, ‘Cowboys Helping Kids’,” said Drummond. “We are proud of this event and we appreciate the ranches, sponsors, fans, and volunteers who help us with this important mission.”
Performances will begin at 7 p.m on Friday, Aug. 25 and Saturday, Aug. 26. Tickets can be purchased at the door or reserved early online at www.lazye.com. Doors open at 5:00 p.m. to allow time for attendees to visit the trade show.
Held in conjunction with the OCA Range Round-Up, a Working Ranch Horse competition will be held on Saturday morning at 8 a.m., Aug. 26 the Lazy E Arena. Anyone who would like to watch the working ranch horse competition is welcome to attend.
In addition, the 4th annual LONGRANGE kid’s roping contest will be held Saturday, Aug. 26 at the Lazy E Arena, Guthrie, Okla. Check-in is at 11 a.m. and the contest starts at noon. Lunch will be provided. No entry fee required. Kids can partake in a roping competition where they will rope a stationary “steer” until one final winner is announced! Prizes will be awarded to the winner of each of the three age divisions.
The afternoon of Sat. Aug. 27, a special event will be held where the participating cowboys get to meet some of the children from the Children’s Hospital Foundation. The cowboys will spend time with the children and show them a few things about ranch life, caring for animals and offer horse rides.
Oklahoma Ford Dealers have been the presenting sponsor of Range Round-Up since the inception of the event back in 1985. OCA credits much of the event’s success to the Oklahoma Ford Dealers.
The Oklahoma Cattlemen’s Association is the trusted voice of the Oklahoma cattle industry and exists to support and defend the state and nation’s beef cattle industry. The OCA officers, board of directors and membership encourages you to join us in our advocacy efforts to ensure less government intervention, lower taxes and a better bottom line. For more information about OCA membership or activities visit www.okcattlemen.org.

Noble Research Institute Represents The Next Step In Noble’s 71-Year Legacy To Advance Agriculture

Ardmore, Okla. – The Samuel Roberts Noble Foundation announced that it has separated its research and education operations from its philanthropic activities to advance its mission and better serve agriculture.
The organization’s research, education and consultation activities will continue forward under a new name, the Noble Research Institute, LLC. The philanthropic activities, including grant-making and scholarship programs, of the original organization are being placed in a new, private foundation, which will carry the name traditionally associated with the organization’s community giving, The Samuel Roberts Noble Foundation.
Members of the Oklahoma nonprofit’s leadership team held two special announcements (one in Ardmore and one in Oklahoma City) and explained that this decision was made so the organization could better serve the agriculture sector; expand collaborations; and better pursue opportunities to bring innovation, technologies and discoveries to agricultural producers and consumers.
“As a single entity, the organization served many audiences with diverse interests,” said Bill Buckner, president and chief executive officer. “By separating our activities into two organizations, each new organization can now build its respective name around its specific operations and build new relationships that were otherwise unavailable.’
Concurrent with this transition, the Noble Research Institute has sought to be recognized by the Internal Revenue Service as a nonprofit, 501(c)(3) agricultural research organization. The option to pursue this designation was enabled in 2015 when Congress modified the Internal Revenue Code to create agricultural research organizations, a new form of 501(c)(3), public charity focused on the conduct of agricultural research.
“Through the Noble Research Institute, we are continuing the vision of our founder, Lloyd Noble,” Buckner said. “He challenged us to explore new frontiers in innovation to help solve agriculture’s most pressing challenges, and this change will open up new possibilities.”
The Institute will seek to add to its existing collaborations with government research organizations, universities and industry, to solve problems and deliver solutions. Additionally, the Noble Research Institute will seek funding and support to complement its own investments in agricultural research and education.
While the organizational transition will help create new opportunities, the Noble Research Institute will continue to embrace the key activities that have been the cornerstones of the organization’s work for more than seven decades. The Institute will continue to conduct agriculturally focused research, provide education from youth to adult, offer no-cost consultation to regional agricultural producers, and manage demonstration and research farms.
“While there is considerable excitement about the changing structure, the focus areas of our organization and our culture will not change,” Buckner said. “We remain committed to our culture of hard work, innovation and philanthropy. Additionally, but through a separate organization, the new Noble Foundation is committed to fulfilling the philanthropic legacy of Lloyd Noble by awarding scholarships and making charitable grants that advance agriculture, cultivate good health, support education and build stronger communities.”
Moving forward, the new Noble Foundation will continue to conduct grant-making and scholarship activities. Grant requests will be submitted, processed and reviewed by the Noble Foundation’s board of directors as they always have.
“This is an exciting time for Noble,” Buckner said. “This evolution places us in an even better position to meet local, national and even global agricultural challenges. We are grateful that our founder had the vision to create this organization and that its board has shared and stewarded such vision. Today, more than ever, we are well-positioned to expand our network of global collaborations and deliver transformational knowledge and outcomes to benefit a hungry world.”
For more information, visit www.noble.org to learn more about the Noble Research Institute’s operations and personnel. For grant seekers or scholarship applicants, please visit www.noblefoundation.org.

Direct Receipts

Direct Receipts: 28,800

Texas 14,000. 92 pct over 600 lbs. 48 pct heifers. Steers: Medium and Large 1 Current FOB 650 lbs 161.09; 720-730 lbs 148.96; 775 lbs 149.65; 800 lbs 142.88; Sept 700 lbs 150.12; 750 lbs 139.52; Oct 650 lbs 150.00; 750 lbs 143.88; 800 lbs 141.65; Nov 750 lbs 143.49; Del Current 775 lbs 149.00; Oct 750 lbs 150.75; Nov 625 lbs 153.50; 725 lbs 144.27; 750 lbs 148.50; 800 lbs 144.75. Medium and Large 1-2 FOB Current 625-635 lbs 158.93; 650-680 lbs 151.47; 725-740 lbs 148.30; 750-790 lbs 144.70; 895 lbs 139.00; Del 585 lbs 161.00; 675 lbs 157.50; 725 lbs 150.00; 775-790 lbs 149.04. Heifers: Medium and Large 1 FOB Current 670 lbs 143.50; Oct 650 lbs 145.25; 700-725 lbs 136.27; Nov 550 lbs 146.50; 700-725 lbs 135.65; Del Sept 700 lbs 144.53; Oct 725 lbs 138.40; 750 lbs 142.00; Nov 625 lbs 143.50; 650 lbs 148.60; 700-725 lbs 140.86. Heifers: Medium and Large 1-2 FOB Current 625-645 lbs 136.00; Del Oct 770 lbs 137.00.
Oklahoma 2300. 100 pct over 600 lbs. 20 pct heifers. Steers: Medium and Large 1 FOB Oct 630 lbs 161.29; Del Current 650 lbs 167.47. Medium and Large 12 FOB Current 775 lbs 148.92. Heifers: Medium and Large 1 FOB Oct 600 lbs 151.35. Medium and Large 1-2 FOB Sept 700 lbs 141.70; Nov 700 lbs 131.85.
New Mexico 700. 100 pct over 600 lbs. 100 pct heifers. Heifers: Medium and Large 1-2 FOB Oct 770 lbs 135.67.
Kansas 2000. 100 pct over 600 lbs. No heifers. Steers: Medium and Large 1 FOB Current 725 lbs 149.00; 825 lbs 149.00; Oct 775 lbs 145.35; Del Current 860 lbs 135.70. Medium and Large 1-2 Del Current 675-680 lbs 155.14; 725-740 lbs 152.51; 750-790 lbs 149.27.

National Feeder Cattle Summary

St. Joseph, MO — August 11
National feeder cattle receipts: 160,200

Feeder steers and heifers opened the week steady to $4 higher. However, feeders took a downturn later in the week trading $3-10 lower. Southeast feeder markets were mixed, trading $8 lower to $6 higher. Early-week demand was moderate to good on active trading, with moderate at best on later week sales. There was optimism going into the week, in spite of August having a bad reputation for being tough on the markets. Producers felt confident, cashing in on last week’s gains and order buyers ignoring the negative signals in the market place. These signals could not be ignored any longer on August 9 as the CME feeder cattle futures closed down the limit on contracts through January and live cattle futures posted triple digit losses. Buyers were forced to pay for cattle at discounts to breakeven or make a profit. Live cattle futures for August closed the week below support levels at $109.72 and feeder cattle at $141.77 on the August contract. Despite the lower market, low feed costs and the surplus of corn in farmer feeder country continues to spur demand for steers. Prices in the Northern Plains and upper Midwest continue to be the highest in the nation. Cattle producers in that area are taking advantage of the market before demand decreases as farmers will soon be busy with corn and soybean harvest. USDA’s August supply and demand report was released August 10, projecting a higher than expected corn yield of 169.5 bushels per acre, which is still at a comfortable level to satisfy demand for cattle feeders. Corn production is estimated at 14.153 billion bushels, and corn ending stocks were estimated at 2.273 billion bushels. If these projections hold true, this year’s crop will be the third highest on record for yield and production. Feedlot trade occurred on August 8 in Kansas with live sales trading $1-2 lower than last week mostly at $115 and in Nebraska dressed sales sold $2-3 lower at $185. More cleanup trade ensued on August 9 trading steady to August 8 with live sales in Kansas at $115 and dressed sales in Nebraska at $185. The Texas Panhandle started negotiating slaughter cattle on August 9 with live trades $2.50-3.00 lower at $115 and Nebraska $2 lower at $116 as compared to the previous week. The last time cash fed prices and spot live cattle futures were this low was in December 2016. The cooler temperatures throughout the past two weeks has helped relieve cattle from heat stress and allowed them to perform well in the feed yards. Livestock have seen quick gains from the previous month. Choice boxed-beef closed August 11 $4.01 lower at $199.60 with Select $1.19 lower at $196.12 when compared to August 4 close.
Texas 3900. 70 pct over 600 lbs. 51 pct heifers. Steers: Medium and Large 1 part load 706 lbs 148.50. Medium and Large 1-2 400-450 lbs (421) 153.04; 550-600 lbs (575) 150.39; 650-700 lbs (681) 150.23; 700-750 lbs (715) 142.80; 750-800 lbs (764) 141.09; 800-850 lbs (837) 134.46; 850-900 lbs (859) 133.68. Heifers: Medium and Large 1 600-650 lbs (646) 142.17; 700-750 lbs (704) 133.85. Medium and Large 1-2 350-400 lbs (375) 142.43; 500-550 lbs (535) 135.18; 550-600 lbs (575) 130.47; 600-650 lbs (616) 136.82; 650-700 lbs (673) 133.46; 700-750 lbs (719) 133.21; 750-800 lbs (768) 130.15.
Oklahoma 22,400. 71 pct over 600 lbs. 36 pct heifers. Steers: Medium and Large 1 300-350 lbs (325) 198.09; 350-400 lbs (385) 182.52; 400-450 lbs (421) 178.76; 450-500 lbs (478) 178.43; 500-550 lbs (521) 163.73; 550-600 lbs (577) 160.26; 600-650 lbs (623) 156.46; 650-700 lbs (676) 154.55; 700-750 lbs (721) 149.82; 750-800 lbs (779) 143.10; 800-850 lbs (815) 141.17; 850-900 lbs (874) 138.20; 900-950 lbs (914) 132.01; 950-1000 lbs (970) 130.01; 1050-1100 lbs (1061) 126.36. Medium and Large 1-2 400-450 lbs (430) 169.68; 450-500 lbs (473) 165.70; 500-550 lbs (522) 158.74; 550-600 lbs (581) 158.26; 600-650 lbs (631) 150.99; 650-700 lbs (674) 150.23; 700-750 lbs (728) 146.40; 750-800 lbs (778) 141.82; 800-850 lbs (825) 138.62; 850-900 lbs (884) 133.53; 900-950 lbs (922) 129.62; 950-1000 lbs (982) 130.07. Heifers: Medium and Large 1 300-350 lbs (329) 158.62; 350-400 lbs (374) 152.96; 400-450 lbs (427) 153.68; 450-500 lbs (473) 148.09; 500-550 lbs (523) 146.39; 550-600 lbs (571) 141.20; 600-650 lbs (629) 141.69; 650-700 lbs (670) 140.45; 700-750 lbs (722) 135.76; 750-800 lbs (767) 133.78; 800-850 lbs (818) 128.23; 850-900 lbs (879) 126.63; 900-950 lbs (911) 122.44; 950-1000 lbs (972) 118.54. Medium and Large 1-2 350-400 lbs (373) 149.58; 400-450 lbs (434) 147.04; 450-500 lbs (484) 147.58; 500-550 lbs (533) 142.65; 550-600 lbs (575) 139.68; 600-650 lbs (631) 137.02; 650-700 lbs (670) 130.03; 700-750 lbs (731) 133.26; 750-800 lbs (779) 130.16; 850-900 lbs (869) 124.32.
New Mexico 2800. 38 pct over 600 lbs. 43 pct heifers. Steers: Medium and Large 1 400-450 lbs (436) 171.24; 500-550 lbs (537) 151.41; 700-750 lbs (716) 142.28. Medium and Large 1-2 350-400 lbs (371) 184.88; 400-450 lbs (439) 168.51; 600-650 lbs (627) 149.41. Heifers: Medium and Large 1 400-450 lbs (433) 149.29; 500-550 lbs (520) 140.82; 550-600 lbs (567) 136.25; 650-700 lbs (663) 130.48. Medium and Large 1-2 500-550 lbs (525) 145.20.
Kansas 10,700. 93 pct over 600 lbs. 33 pct heifers. Steers: Medium and Large 1 300-350 lbs (331) 211.36; 350-400 lbs (380) 199.30; 500-550 lbs (534) 170.22; 550-600 lbs (574) 165.49; 600-650 lbs (631) 161.84; 650-700 lbs (662) 157.77; 700-750 lbs (726) 151.15; 750-800 lbs (770) 146.63; 800-850 lbs (816) 145.25; 850-900 lbs (875) 142.21; 900-950 lbs (922) 136.80; 950-1000 lbs (971) 135.02; 1000-1050 lbs (1023) 135.14. Medium and Large 1-2 550-600 lbs (578) 160.08; 700-750 lbs (723) 143.31; 750-800 lbs (775) 140.94; 800-850 lbs (819) 140.52; 850-900 lbs (883) 135.99; 900-950 lbs (909) 135.29; 950-1000 lbs (989) 130.94; 1000-1050 lbs (1008) 130.78; Heifers: Medium and Large 1 300-350 lbs (328) 173.63; 350-400 lbs (394) 181.87; 400-450 lbs (435) 171.70; 450-500 lbs (456) 162.33; 500-550 lbs (527) 148.58; 550-600 lbs (573) 148.77; 600-650 lbs (621) 146.76; 650-700 lbs (677) 144.06; 700-750 lbs (722) 139.26; 750-800 lbs (778) 136.94; 800-850 lbs (820) 135.97; 850-900 lbs (862) 133.31; pkg 952 lbs 128.75. Medium and Large 1-2 550-600 lbs (585) 144.99; 600-650 lbs (638) 140.81; 650-700 lbs (677) 137.48; 700-750 lbs (740) 136.66; 750-800 lbs (781) 132.59; 800-850 lbs (819) 129.92; part load 890 lbs 126.25.
Missouri 23,200. 64 pct over 600 lbs. 37 pct heifers. Steers: Medium and Large 1 350-400 lbs (379) 183.08; 400-450 lbs (428) 181.34; 450-500 lbs (479) 181.46; 500-550 lbs (526) 172.62; 550-600 lbs (578) 164.94; 600-650 lbs (622) 163.02; 650-700 lbs (675) 157.17; 700-750 lbs (724) 151.74; 750-800 lbs (775) 150.21; 800-850 lbs (827) 145.13; 850-900 lbs (872) 141.40; 900-950 lbs (912) 137.18; 950-1000 lbs (983) 135.37. Medium and Large 1-2 350-400 lbs (381) 169.01; 400-450 lbs (429) 166.98; 450-500 lbs (478) 163.26; 500-550 lbs (528) 157.72; 550-600 lbs (576) 155.98; 600-650 lbs (629) 155.24; 650-700 lbs (671) 151.36; 700-750 lbs (727) 143.29; 750-800 lbs (780) 139.83; 800-850 lbs (830) 142.72; 850-900 lbs (886) 136.84; 900-950 lbs (904) 134.37; 950-1000 lbs (964) 128.18. Holstein Steers: Large 3 550-600 lbs (580) 83.34; 750-800 lbs (779) 87.75; 850-900 lbs (876) 84.70; 900-950 lbs (930) 79.26. Heifers: Medium and Large 1 300-350 lbs (332) 164.87; 350-400 lbs (380) 159.92; 400-450 lbs (427) 156.89; 450-500 lbs (477) 151.59; 500-550 lbs (523) 150.89; 550-600 lbs (577) 148.01; 600-650 lbs (628) 147.59; 650-700 lbs (674) 143.74; 700-750 lbs (714) 138.43; 750-800 lbs (781) 135.12; 800-850 lbs (817) 133.41. Medium and Large 12 300-350 lbs (319) 170.41; 350-400 lbs (377) 160.59; 400-450 lbs (427) 147.37; 450-500 lbs (475) 143.70; 500-550 lbs (522) 146.06; 550-600 lbs (574) 143.99; 600-650 lbs (625) 142.35; 650-700 lbs (675) 137.90; 700-750 lbs (722) 135.04; 750-800 lbs (770) 132.15; 800-850 lbs (833) 129.37; 850-900 lbs (863) 124.05.
Arkansas 9200. 24 pct over 600 lbs. 40 pct heifers. Steers: Medium and Large 1 300-350 lbs (324) 194.13; 350-400 lbs (371) 181.24; 400-450 lbs (423) 166.69; 450-500 lbs (471) 158.75; 500-550 lbs (523) 154.58; 550-600 lbs (571) 150.08; 600-650 lbs (625) 147.47; 650-700 lbs (667) 142.35. Heifers: Medium and Large 1 300-350 lbs (322) 159.86; 350-400 lbs (371) 156.28; 400-450 lbs (423) 147.39; 450-500 lbs (474) 142.46; 500-550 lbs (522) 137.68; 550-600 lbs (572) 135.26; 600-650 lbs (623) 132.67; 650-700 lbs (676) 132.49.

 

 

 

 

 

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Thursday, August 17, 2017 1:31 PM