This year's Pro Farmer Midwest Crop Tour was highly anticipated due to the early season problems and high variability seen in the soybean crop. The tour measures soybean pod counts in 3x3 foot squares across major producing states to estimate overall soybean yields. The results showed some states like Illinois and Indiana having pod counts above their 3-year averages, while states like South Dakota, Nebraska and Minnesota were below their 3-year averages.
The overall soybean yield estimate from the tour came in at 49.7 bushels per acre, below the USDA's August estimate of 50.9 bushels per acre. Using a 2% margin of error, Pro Farmer's yield estimate ranges from 50.7-48 bushels per acre. This will likely be viewed as friendly for soybean prices heading into next week.SourceMoneyGuru-https://www.mgkx.com/5145.html
However, the big wild card is the extreme heat and dryness that hit the Midwest this past week, which many on the crop tour said was causing major damage to soybean plants. There were reports of aborted pods and smaller, fewer beans in stressed areas. In some fields in the driest regions, up to 20% of pods were reported as aborted.SourceMoneyGuru-https://www.mgkx.com/5145.html
With the extended forecast showing only scattered, light rains over the next 10 days across the soybean growing region, further damage to the soybean crop is likely. Once harvest begins, we may see additional reductions in yield estimates. Monday's weekly crop conditions report will be very important to gauge the deterioration seen this past week. A surprise bullish reaction in soybean prices is possible if conditions fall sharply, especially considering the Pro Farmer results already came in below the USDA.SourceMoneyGuru-https://www.mgkx.com/5145.html
The soybean market will be keeping a very close watch on weather and crop conditions in the coming weeks. Additional stress to the soybean plants may lead to lower yields than currently expected. For commodity investors, be ready for potential volatility if crop conditions take a turn for the worse.SourceMoneyGuru-https://www.mgkx.com/5145.html SourceMoneyGuru-https://www.mgkx.com/5145.html