I don't know the origin of the phrase, but it refers to how well your corn will do that year. Corn is expected to be at least knee-high by late June or early July. If it is, this usually predicts that you'll have a good yield that year. If the corn hasn't gotten off to a good start, chances are that your yield won't be good that year.
That's an old saying. Really old in fact. When you use the human body as a gauge for measuring, you know it's an old way of doing things. Like measuring distance on land by your gait. While you're walking, each stride is roughly 3 feet long