Tuesday, July 26, 2011

Corn and soybeans, perhaps not surprisingly, both moved lower this week. Remembering that the corrected model is the 'best guess' and the difference between corrected and uncorrected is the 'normal' decline. We lost over a bushel in corn this week on changes in conditions and a half a bushel in soybeans. When the August state by state numbers are released I'll post those comparisons as well.

In cotton, by all accounts I'm way to high. The model assumes that the condition numbers include all planted area. The crop in very poor and poor condition is never harvested and thus the remainder of the crop is in better average condition. So acres that move from fair to poor are not harvested and the average condition of the harvested crop moves higher. This appears to have been the case in Texas in 1998 when the harvesting rate was only 57% but there was a record crop yield. Having said that, I think we are operating well outside the models previous experience. I'm running a harvesting rate of less than 50% in Texas and my aggregate harvested area is at or slightly below that of USDA. There has been some suggestion that the land in Texas that was zeroed out isn't entering into the condition reports and that the conditions reported are for areas that will be harvested. This would suggest that what is rated 'fair' in dryland areas isn't the same condition as 'fair' in irrigated areas. This isn't the way it is supposed to be, but as a subjective measure I find it very plausible.

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