The great yield debate

By Jon Scheve

National yields are always highly debated within the trade from when they are first published in the May USDA WASDE report until they are nearly finalized in the January report. It makes sense, because yields are the biggest driver of supply and the quickest way for prices to rally.

Each year, the USDA publishes a trend line yield that seems too high for some market participants.  Often, it’s because the yield estimate requires a new record or a tying of a previous record yield. 

I expect the USDA will start the year in May with a national yield of 181 bushels per acre.  For one, it would be near the 50-year straight-trendline yield.  Two, it’s the estimate the USDA Economic Forum showed in their February report, and the USDA has used the forum’s yield estimate as their starting point for the last few years.

How often do new records happen?… Continue reading