Potential for 2012 Déjà Vu in US Corn Conditions

Despite the variety of weather the corn belt has received so far this year, crop ratings are holding better than expected.  Fears of repeat of 2012 crop conditions seem overblown (for now).

For the week ending July 4, 2021, US Corn conditions were rated 64% good to excellent by the USDA, which is unchanged from last week.

USDA, July 6, 2021

Summary:

• Crop conditions during the 2012 drought plummeted in June and July, and fears of a repeat persist in the eyes of traders.
• AEGIS notes the crop condition is just below average, but not extreme. See the chart below, right.
• During the corn and soybean growing season, the USDA issues their weekly update on corn conditions at 3PM CST on Monday afternoon (delayed a day this week due to the July 4 holiday).
• Conditions are broken into five categories: Very Poor, Poor, Fair, Good, and Excellent.
• These conditions are organized by state, along with a national average. 
• Traders and other market participants follow and review the national combined good-to-excellent conditions.  

AEGIS Thoughts & Strategies: Every year during the growing season, social media is flooded with photos of corn and soybeans in various stages of growth and condition.  Naturally, the photos of devastation get the most press and discussion.  We have a plentiful "crop" of devastation photos this year; however, we should view these photos with discretion.  There is plenty of growing season left, thus if weather stabilizes or improves, crop conditions should follow suit.  Moreover, the 2012 drought and lackluster conditions were widespread throughout corn belt, this year's poorer conditions seem to concentrated, namely in North and South Dakota.  

P.S. - Prior to the July 6 condition report release, corn was down limit (40 cents) on improving weather in the western corn belt.  Also, a weekend motorcycle trip through northern Illinois by this author confirmed the potential for a very good crop in this section of the state.