June 19, 2012

 

US corn, soy outlook diverse due to varied weather

 

 

US corn and soy production outlook is diversified as the east experiences hot and dry weather while the north and northwest regions are aided by rain, buoying condition ratings, analysts said.

 

A Reuters poll of analysts indicted the US Department of Agriculture (USDA) on Monday will show a two percentage point decline in condition ratings for the US corn and soy crops.

 

The poll showed an expected 64% good-to-excellent condition rating for the US corn crop, down from 66% in that category a week ago and 58% of the soy crop was expected in good-to-excellent shape, down from 60%.

 

The USDA is expected to release its updated crop progress report on Monday (June 18).

 

"Ratings will be slightly better in Nebraska and Minnesota but Illinois, Indiana and Iowa are likely to fall," said Jake Vrabel, analyst for Chicago Capital Markets.

 

Hot and dry weather in the US southeast and Delta crop growing regions led to the forecast decline in crop ratings and more declines are likely this week as dryness continues in such states as Indiana, Ohio and Michigan, the analysts said.

 

"A lot of the southern areas missed the rains over the weekend and there will be more stress on crops this week," said Shawn McCambridge, analyst for Jeffereies Bache.

 

The slide of crop conditions will be slowed by rainfall this growing season in northern and northwest crop states including much of Illinois, Iowa, Minnesota, the Dakotas and Nebraska.

 

"Obviously the eastern states are where they will suffer the most and probably a little uptick in the west," a trader said.

 

Dry weather in the southeast Midwest is expected to continue stressing corn and soy crops for the next week to 10-days while beneficial rainfall late last week and more this week will buoy crops elsewhere, an agricultural meteorologist said on Monday (June 19).

"There's still a situation in the southeast with a lack of rain. This includes Indiana, Ohio, Michigan and much of the Delta," said John Dee, meteorologist for Global Weather Monitoring.

 

Crop-friendly rainfall was received late last week in several important growing areas of the Midwest including dry areas of Illinois, he said.

 

"They had some pretty decent rains of 0.50 inch to 1.50 inches in some of the dry areas late last week," Dee said. More rain is expected this week in the northern and northwest Midwest which will help buoy crop prospects, he said.