,
5 tweets,
2 min read
Read on Twitter
1. One more thread today. I want to provide some historical perspective on the magnitude of the supply shock in corn that the market is currently trying to absorb.
2. Went back and looked at historical changes in total US corn production YOY from 1990-2018. Computed % YOY changes for each year. I then multiplied the % changes for each year by 2018 production in bushels. That way changes are normalized for growing production over time. 
3. Chart shows Top 5 largest "normalized" changes in corn production over 1990--2018 and three scenarios for 2019. All of the 2019 scenarios assume a national average yield of 170bpa. Given these assumptions, is 2019 looking like a "historic" production decline?
4. Yes, we are looking at one of the larger historic YOY US corn production declines under each of the scenarios considered for 2019. 5M acre loss comparable to 2005. 10M acre loss similar to 2012. 15M acre loss in top 3.
5. The chart also shows even under a 15M acre loss we have a long ways to go to equal the two worst production declines (normalized) in 1995 and 1993. Those were truly mammoth declines. It would take some further substantial declines in corn yield in 2019 to get there.
