With this past Monday’s Crop Progress report showing corn at 60% emerged, and soybeans close behind at 49%, USDA-NASS will now begin including crop condition ratings for those commodities in their weekly reports. Traders closely watch these reports each week, as they provide a reliable and frequent outlook on any deterioration or improvement of the crop.
At Pro Farmer, we also utilize the data to form our Crop Condition Index (CCI), which compresses the USDA’s weekly crop progress report into a single, weighted, easy-to-track number that’s widely used to monitor the health and potential of US corn and soybean crops during the growing season.
Crop condition methodology
USDA’s crop-condition survey, while subjective, relies on a set standard of definitions that each respondent is trained on and receives refreshers for in the spring. The survey canvasses roughly 3,600 individuals across the country “whose occupations provide them opportunities to make visual observations and frequently bring them in contact with farmers in their counties” per USDA-NASS methodology. Typical respondents include extension agents, FSA staff, or other individuals in similar roles that can provide unbiased and informed outlooks. Estimates from respondents are made at the county level before being summarized into the state and national level indications that are published by the agency.
While there is not a one-for-one correlation between any of the crop condition ratings and USDA’s yield forecasts that are published each month, the outlook also provides a general idea of how the agency feels about the performance of the crop, and provides a loose idea of the direction the agency may shift yields in from one month to the next.
Last year’s initial rating saw corn in the good to excellent categories rated 68%, compared to the five-year average of 72%. Soybeans saw an initial rating of 67%, compared to the five-year average of 67.6%. News agencies Reuters and Bloomberg typically conduct polls each Monday before the release of the report detailing a summary of analyst estimates. One early estimate of how the condition ratings may pan out is provided by Pro Farmer crop consultant Dr. Michael Cordonnier, who expects corn to be rated 74-75% Good to Excellent, and soybeans 70-71% across the categories.
How Pro Farmer’s CCI works
The Pro Farmer CCI rates crops on a scale from 0 to 500, with 500 being perfect. The metric re-weights the ratings of the crops at the state level based on the average of the previous three years of production, while USDA’s relies on acreage alone. This index allows for conditions in a high-yielding corn state like Iowa to have more of an impact on the rating than an acre located in a state with lower yields and total production.
The CCI tracking of the winter wheat crop this year has shown an excellent practical use case for the metric. USDA reports only indicate winter wheat conditions as a whole, not specifying between hard and soft red winter wheat, whereas our index does by utilizing data from the agency that breaks down production in the wheat classes at the state level. The index shows HRW has declined from 270.81 to start the year to 240.60 as of last Monday. SRW, which is mostly grown outside of the drought stricken Plains, has actually seen a mild rise from 360.64 in the first weeks report to sit at 365.36 currently.
