August 3, 2009

Late developing soy crops across portions of the central US are raising concerns about reduced yield potential and the threat of crop losses if the growing season is cut short by an early frost.

 

The lagging development pace of soybeans in key growing states of Illinois, Indiana, Minnesota and Ohio provides for a lot of elasticity in soy yield potential, making August weather conditions even more critical for final output.

 

"Slow soy growth is attributed to late-planted crops and could lead to reduced yields, but if weather patterns hold true through August with ample moisture, yield reductions may not be as bad," said Charles Mansfield, extension agronomist with Purdue University.

 

The late plantings and cooler-than-normal summer weather resulted in smaller soy plants at this point in the season compared with previous years.

 

"Small soy or late-planted soy that do not reach full canopy by flowering probably have lost some yield potential," said Chad Lee, University of Kentucky agronomist, in a crop update. "Cooler temperatures also reduce the chances of soy reaching full canopy by flowering."

 

Lee points to various scenarios that could lead to yield reductions.

 

As of July 26, the USDA reported the percentage of soy crops in the blooming of stage of development at 63 percent, compared with the five-year average of 76 percent.

 

"In 2008, when 60 percent of the crop was blooming and lagging in maturity similar to 2009, a month-by-month yield decline from July's 41.6 bushels per acre carried into the month of November with 39.3 bushels per acre and a January annual estimate of 39.6 for a total decline of 4.8 percent," according to a research note from Allendale Inc.

 

"By using the resulting decline in 2008, final yield could result in 2009 yield per acre of 40.55 and end stocks of 118 million bushels versus Allendale's present outlook of 275 million bushels and USDA's 250 million bushels," Allendale said in the note.

 

USDA used a trend line yield of 42.6 bushels an acre in its July 10 supply and demand report.

 

However, weather in August will ultimately be the key determinant of 2009 soy yield potential.

 

Delayed seedings had set soybeans on an extended maturity cycle and cool Midwest summer temperatures further delayed and elongated the time the crop will take to mature, analysts said.

 

"An extended growing season would be in the crop's favour as well," Mansfield said.

 

"A much larger percentage of planted soy in 2009 will be in harm's way of a damaging frost this coming September than normal, and if the current cold temperature pattern remains in place through September, the possibility certainly exists for a frost to create devastating consequences for overall production," said Shawn Hackett, president of Hackett Advisors, in a market note.

 

"In a year where old crop US supplies are near record tight, the world has no buffer stock to absorb such a shortfall in US production as it might have had in years past," Hackett said.