Corn stands as America's most produced grain, and its dominance has only grown since the 1960s. This expansion has been driven by several key factors: the booming livestock industry's demand for feed, the widespread adoption of High Fructose Corn Syrup (HFCS) as a sugar substitute, and increasing use of corn-based food ingredients. Government mandates, particularly the 2005 Renewable Fuel Standard and 2007 Energy Independence and Security Act, further accelerated this growth through biofuel requirements. The scale of expansion is striking: since 2000, corn acreage has grown by 208,000 hectares annually - equivalent to 80% of Rhode Island.
The Critical Role of Rainfall in Corn Production
The Rainfall-Yield Relationship
Among the three major grains - wheat, corn, and soybean - corn shows the highest sensitivity to rainfall patterns and requires the most amount of water. After fertilizer prices, precipitation stands as the most crucial factor affecting corn output. Understanding this relationship is key to predicting and optimizing yields.
Asymmetric Impact and the Saturation Threshold
Like most crops, the relationship between rainfall and corn yields is non-linear and asymmetric. Let’s explore how this works:
Linear: When rainfall changes by x%, yield changes by y%.
Non-linear: When rainfall changes by x%, yield might first change by y%, but after a threshold has been reached, the yield starts changing by (y+a)%, and then by (y+b)% and so on.
Asymmetric: When the rate of change is different on the positive side of the signal and the negative side of the signal.
While increased rainfall provides diminishing returns, decreased rainfall can devastate yields.
This non-linear relationship makes precipitation patterns particularly crucial for corn producers. Even more interesting, the yield relationship actually inverts beyond a certain precipitation level. While most crops can handle excess rainfall when drainage is good, soil saturation eventually becomes problematic. When the water table rises to root level, the consequences can be severe, leading to significant yield losses.
Figure 2 illustrates these nuances.
Technical Note: Corn yield anomaly is calculated as the difference between expected and actual yields, with expected yields based on technological advancement trends. Rainfall data represents production-weighted averages from regions accounting for 75% of total U.S. corn output.
Recent Historical Impact
The 2018-2019 growing seasons provide a compelling case study of rainfall's impact. For reference, the corn season is from April to November. In 2018, delayed rainfall disrupted planting schedules (not shown on Figure 2), followed by excessive precipitation during the growing season. The resulting soil moisture carried over into 2019, combining with additional heavy rainfall to create significant yield reductions. While drainage solutions exist, they require substantial capital investment and are typically only economical for smaller, high-value crop operations.
While the relationship between corn yield and rainfall is complex, it can still be modeled.
Future Outlook: Planette's Predictions
How is the corn crop going to fare in the next season? Figure 3 shows the corn futures (CME) prices now (1 contract = 5000 bushels). The current season is just about to end and most market participants would have no idea about what is going to happen in March, April or May 2025.
Planette's Advanced Forecast Insights
This price structure makes our rainfall predictions particularly valuable. While the futures market shows relatively mild expectations, our analysis indicates many corn-producing regions with above-average rainfall for March, April & May 2025 and many with below-average rainfall for the same period (see Figure 4).
This divergence between current market pricing and our long-term weather outlook by region presents potential opportunities.
Transform Your Decision-Making
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Ready to gain your competitive edge? Start your free trial of Sura™ today and access industry-leading environmental predictions that put you ahead of the market. Whether you're hedging production, trading spreads, or managing procurement risk, Planette's forecasting platform provides the insights you need to make informed decisions in an increasingly volatile agricultural marketplace.
Note: All forecasts and market analyses are current as of today's date. Trading decisions should incorporate ongoing environmental forecast updates available through the Sura™ platform.
