June 26, 2007
US crop progress wrap: Rains help corn, soybeans, but hurt wheat
Recent rains in the Corn Belt helped improve crop conditions for corn and soybeans in the week ending Jun 24, the US Department of Agriculture said in its weekly crop progress report.
However, winter and spring wheat crop conditions declined as additional rain in the southern and northern plains hindered winter wheat harvesting and spring wheat growth.
Corn
The USDA reported higher crop condition ratings, with 73 percent of the crop in good-to-excellent condition, up 3 percentage points from last week.
Illinois had the most improvement in conditions by gaining 13 points for a 69 percent good-to-excellent rating. The state had lost 21 points in the good-to-excellent rating the week before.
"This is a very timely and beneficial rain in Illinois," said Bill Nelson, a grain analyst at A.G. Edwards and Sons. "Many areas had been getting low on moisture and they got a lot of reprieve."
Indiana gained 1 percentage point in the good-to-excellent rating from last week, while Iowa remained unchanged. Ohio lost 4 percentage points from last week, with 51 percent of the crop in good-to-excellent condition.
Corn futures are resting at support, said Don Roose, president of US Commodities in West Des Moines, Iowa. He said he does not expect the crop progress report to have much effect on Tuesday's market.
"We've been talking weather here for three or four days, and I think we're to the point where we've already got that dialled in," Roose said.
DNT Meteorlogix predicts mostly dry conditions with few showers in the western Midwest through the weekend, scattered showers and thunderstorms in the southern Midwest Wednesday, and some showers in Missouri Thursday and Friday. Temperatures will be near to above normal through Wednesday, and near to below normal Thursday through Saturday.
DNT Meteorlogix predicts the eastern Midwest will receive light-to-moderate showers Tuesday and heavier showers leaving 0.10-0.75 inch of rain through Thursday, plus dry conditions during the weekend. Temperatures should be near to above normal through Wednesday and near to below normal Thursday through Sunday.
The 6-10 day forecast for the Midwest calls for above normal temperatures with near to below normal rainfall.
Soybeans
US soybeans saw a one-percentage-point increase in crop conditions from the previous week, with 66 percent of the crop in good-to-excellent condition. The crop benefited from rains in the Corn Belt during the past week. However, only six states saw an improvement in crop conditions, while 10 states marked a decline.
Illinois led the results with the most improved soybean conditions, gaining 13 percentage points to have a 65 percent good-to-excellent crop rating.
Indiana's rating remained unchanged at 43 percent good-to-excellent, while Iowa declined 2 percentage points to 75 percent of the crop in good-to-excellent condition, and Ohio lost 3 percentage points to 46 percent in good-to-excellent condition.
"The market will pay attention to these numbers, but it's more interested in what the next forecast has to say, Nelson said. He attributed recent losses in the market to the expected decline in crop conditions.
Winter wheat
The USDA reported the US winter wheat harvesting average down by 33 percentage points from this time last year, and down 14 percentage points from the five-year-average. The crop also declined 2 percentage points from last week's rating, with 48 percent of the crop in good-to-excellent condition.
"We're really down to the point on wheat where harvest is going to tell us more than these crop condition ratings," Roose said. "If you don't have timely harvest, you loose yield."
With a wet forecast in the plans this week, harvesting numbers could continue to lag behind.
Kansas has harvested 20 percent of its winter wheat, up from 2 percent last week, but down from 77 percent last year and 49 percent for the five-year-average. Oklahoma has harvested 52 percent, up from 41 percent last week, but still trailing last year's 97 percent harvested and 86 percent five-year average. Texas has harvested 45 percent of its winter wheat, up from 31 percent last week but down from 86 percent last year and 73 percent for the five-year average.
Fundamentally, the decline in harvest could give support to the market, Nelson said.
DNT Meteorologix expects showers and thundershowers in northern Oklahoma and Kansas Tuesday and Wednesday, but remaining dry in the far north-western areas.
Scattered showers are expected in Kansas and southward Thursday, and in Oklahoma and southward Friday, with other areas in the central and southern plains remaining mostly dry through the weekend. Temperatures will be mostly below normal Tuesday through Thursday, and remaining below normal in the south through Sunday but above normal in the north through Sunday.
The 6-10 day outlook in the central and southern plains should bring average to above normal temperatures in the north and below normal in the south, and rainfall near to above normal in the south and near to below normal in the north.
Spring wheat
The USDA reported a six-percentage-point decline in crop conditions of spring wheat with 79 percent of the crop in good-to-excellent condition for the week ending Jun 24, down from last week's historic high of 85 percent.
"We were at some awfully lofty levels," Roose said.
Continued rain in the forecast for the northern plains could bid people to begin paying more attention to spring wheat, Roose said.
Montana's crop conditions declined by 14 percentage points, with 74 percent of the crop in good-to-excellent condition; Minnesota's crop conditions declined by 6 percentage points, with 73 percent of the crop in good-to-excellent condition.
The average headed spring wheat is 33 percent, down from 44 percent last year but up from the 27 percent five-year average.
If weather forecasts continue to predict rain in the plains, "this could be a possible bullish factor for wheat tomorrow," Nelson said.
