· Analytic
Z4263 USDM Drought Corn States
The U.S. Drought Monitor seven-state corn-belt severity composite. Monotone +4.40 pp POS edge on fwd 60d is one of the strongest in the corn library. Daily IC +0.21 at p=9e-68 holds up on non-overlapping 60-day blocks (p=0.029, n=111) — unusual for commodity signals and the robust page in the batch.
Current reading
+0.087
NORMAL
DAILY · SIGNAL
As of Oct 30, 2026. Updated nightly.
Current composite
+0.087
On the plus-or-minus one scale; near-neutral, no acute drought regime
Signal state
Mild drought
53 consecutive days in state (episode start 2026-08-18)
Severe drought fwd 60d
+1.20%
2,205 days (24.4%), edge +0.91pp (run-entry sampling)
Phase 0 per-day high-drought fwd 60d
+4.93%
1,959 days (29.4%, +/-0.5 bands), edge +4.40pp — per-day sampling
Daily IC vs corn fwd 60d
+0.2117
p=9e-68, non-overlap p=0.029 (clean significant)
Current corn CBOT close
$4.48/bu
Front-month continuous back-adjusted
OBJECTIVE
The U. S. Drought Monitor is the authoritative weekly map of drought conditions across the United States, produced jointly by NOAA, USDA, and the National Drought Mitigation Center. Each Tuesday morning the USDM categorizes every county in the country on a five-level severity scale, from D0 (abnormally dry) through D4 (exceptional drought). This signal takes the weekly state-level USDM severity data for seven production-dominant corn-belt states (Iowa, Illinois, Indiana, Nebraska, Minnesota, Ohio, Missouri — collectively approximately 80 percent of U.S. corn production), averages the D2-plus-severity area share across those states, forward-fills to daily, z-scores on a 756-trading-day (3-year) rolling window, and tanh-bounds to the plus-or-minus one scale. HIGHER composite means MORE drought across the belt; LOWER means less. The 26-year empirical pattern across 6,603 live-signal days runs MONOTONE in the direction the mechanism predicts. The High Drought state (composite above plus 0.5) delivers mean corn fwd 60-day of plus 4.93 percent across 1,959 state-days (29.4 percent of sample), edge plus 4.40 pp above the plus 0.53 percent baseline. The Mild Drought state (composite between minus 0.5 and plus 0.5) delivers minus 0.25 percent across 2,021 days (30.3 percent), edge minus 0.78 pp. The No Drought state (composite below minus 0.5) delivers minus 2.11 percent across 2,683 days (40.3 percent), edge minus 2.64 pp below baseline. Clean monotone pattern. The daily Spearman IC is plus 0.2117 at p-value 9.060e-68, deeply significant, AND holds up on non-overlapping 60-day blocks (p-value 0.0289, n=111) — unusual for commodity signals, which typically see non-overlap p-values collapse to insignificance. This is the robust standalone directional signal in the batch. Today the composite reads plus 0.0870 as of 2026-10-30, in the Mild Drought band (near-neutral). The signal is not firing an acute drought regime right now; it sits in the broad transitional zone between no-drought and high-drought. Read on for the mechanism, three signature historical cases, and how to use today’s near-neutral reading in context.
LIVE CHART
Twenty-six years of US Drought Monitor seven-state corn-belt severity composite.
COMPOSITE
+0.087 / tanh
STATE
Mild drought
PHASE
0
FWD 60d
-0.25% (baseline +0.53%)
SAMPLE N
6,603 days
TODAY’S PLAYBOOK READING
STATE
NORMAL
STATE AND PERCENTILE
Mild drought, 53 consecutive days. Composite at plus 0.087 sits near the 60th percentile of 26 years — mid-range, no acute signature.
THE MONOTONE EMPIRICAL PATTERN
High drought +4.93 pct fwd 60d (edge +4.40 pp), Mild -0.25 pct (edge -0.78 pp), No drought -2.11 pct (edge -2.64 pp). Clean monotone from the no-drought tail through the drought tail. One of the strongest state-conditional patterns in the corn signal library.
STANDALONE DIRECTIONAL RELIABILITY
Daily Spearman IC plus 0.2117 at p=9e-68 AND non-overlapping 60-day-block IC plus 0.2075 at p=0.029 (n=111). Non-overlap p stays significant — unusual for commodity signals, where non-overlap typically collapses. Treat as a standalone directional read when the composite leaves the Mild drought band.
WHAT THE CHART SHOWS
The composite sits at +0.087 in the Mild drought band. The seven-state corn-belt D2-plus drought-area share is running near its 3-year rolling norm; no acute signature today. CBOT front-month corn (orange, right axis) sits near $4.48/bu. The 2012, 2022, and 2023 drought bars anchor the Severe drought band firings; the current reading sits well below those episodes.
TOP INPUTS FIRING
- Primary composite +0.087 State Mild drought, neutral band. 53 consecutive days in state; no acute drought regime firing.
- USDM weekly maps, 7 belt states, 3-year rolling D2-plus severity area percent averaged across Iowa, Illinois, Indiana, Nebraska, Minnesota, Ohio, Missouri. Z-scored on 756-trading-day window with 126-day minimum. Weekly cadence, forward-filled daily.
- IC vs CBOT corn fwd 60d: Spearman +0.2117, p=9e-68; non-overlap p=0.029 Deeply significant positive IC on daily sampling AND robust on non-overlapping 60-day blocks (p=0.029, n=111). Clean standalone directional signal when the composite leaves the Mild drought band.
THE TAKEAWAY
What this means for you today
THE NEAR-NEUTRAL READING IS NOT A FIRING
As of October 30, 2026, the composite reads plus 0.0870 — near the long-run median of the three-year z-scored distribution. The signal is not calling an acute drought regime today; it is sitting in the broad transitional band between no-drought and high-drought. The 53-day run in the Mild drought state reflects a corn belt that has been neither dry enough to stress yields nor wet enough to signal structural comfort. For the signal to deliver its strongest edge, the composite must leave this band in either direction.
THE HIGH DROUGHT HISTORICAL EDGE IS THE PAYOFF REGIME
When the composite crosses above plus 0.5 (High drought), historical corn fwd 60-day mean is plus 4.93 percent with edge plus 4.40 pp above the plus 0.53 percent baseline. This is the direct yield-impact pathway: acute belt-wide drought reduces expected production, markets price the risk forward. The 1,959 state-days of history include 2012 (the generational Great Plains drought) and the 2022 summer flash-drought episodes. Transition from Mild to High drought is the setup the signal is built to catch.
THE NON-OVERLAP ROBUSTNESS NOTE
The daily Spearman IC of plus 0.2117 at p=9e-68 is robust on non-overlapping 60-day blocks (p=0.029, n=111) — unusual for commodity signals, which typically see non-overlap p collapse. Treat as a standalone directional read when the composite leaves the Mild drought band. For current near-neutral readings the signal is informative but not directional; the edge regimes sit at the tails.
THE REGIME MAP
The three USDM corn-belt drought regime states, forward returns and sample share
Behavior across the seven-state USDM D2-plus severity composite (CBOT corn benchmark, 2000-05-09 through present). CBOT corn forward 60-day baseline is plus 0.53 pct across 6,603 live-signal days. Clean monotone pattern from No drought (lowest fwd return) through Severe drought (strongest edge).
| State | Phase | Share | Fwd 60d | HAC t | Edge vs baseline | Last firings |
|---|---|---|---|---|---|---|
| No drought | – | 40.3% (2683 d) | -2.11% | -2.64pp | Nov 2024, Oct 2024, Jan 2024 | |
| Mild drought TODAY | 0 | 30.3% (2021 d) | -0.25% | -0.78pp | Aug 2026, Aug 2026, Jun 2026 | |
| Severe drought | + | 29.4% (1959 d) | +4.93% | +4.40pp | Aug 2026, Jul 2026, Jan 2026 |
The historical pattern
Signature historical cases
What this measures
The engine queries weather_data.USDM_DROUGHT_STATE for the seven corn-belt states (IA, IL, IN, NE, MN, OH, MO), sums D2-plus-D3-plus-D4 severity area percentages per state per weekly map date, averages across the seven states, forward-fills daily, z-scores on a 756-trading-day rolling window with 126-day minimum, and tanh-bounds. Market_Phase_Int categorizes the composite into three regimes using plus-or-minus 0.3 on the composite — plus 1 if composite above plus 0.3 (Severe drought), minus 1 if composite below minus 0.3 (No drought), zero in between (Mild drought).
GO DEEPER
Want the full depth?
The full research brief adds methodology detail on the U.S. Drought Monitor seven-state construction, the 756-trading-day z-score window choice, and the full 26-year state-conditional backtest tables. Includes case studies on 2012 Great Plains, 2022 Western-states, and 2023 Illinois flash-drought anchored to actual USDM map evolution, the three-regime state-conditional returns table, and the methodology for pairing with Silking Pace, Emerged Pace, Hail Activity, and the Corn Cycle DNA playbook.
Taxonomy, polarity, state labels
Not investment advice · The analysis on this page is informational and educational. Signal readings, historical case figures, and empirical statistics are derived from publicly available data and are provided without warranty. Hypothetical performance results have inherent limitations, including the benefit of hindsight. Readers who intend to trade should consult a licensed investment professional and see the research brief for the full disclaimer.
Last refreshed Nov 02, 2026 03:53 PM ET