June 27, 2006

 

US crop progress wrap: Corn ratings up, soy unchanged

 

 

US corn crop condition ratings rose slightly from the prior week, while soybeans' condition remained unchanged in the US Department of Agriculture weekly crop progress report released Monday (Jun 26).

 

Analysts expected condition ratings to increase by one to two percentage points in both crops.

 

 

Corn

 

The USDA reported 71 percent of the US corn crop is in good-to-excellent condition, up 3 percentage points from last week's rating and up 6 percentage points from 2005 at the same time. For the top-producing states, Illinois corn is rated at 72 percent good-to-excellent condition, down 5 percentage points from the previous week. Indiana corn is rated at 57 percent good-to-excellent condition, up one percentage point from the prior week's estimates. Iowa is ranked at 78 percent good-to-excellent condition, up 4 percent from last week, and Ohio is up three percentage points at 66 percent.

 

Illinois and Iowa both have 1 percent of the crop at the silking stage this week, and Indiana and Ohio are at 0 percent. All of these top-producing states are below the 18-state average of 5 percent silking.

 

Analysts said rain is needed in the western corn belt for a more successful crop.

 

"I know the trade has been eyeing the precipitation in the Western corn belt," said Terry Reilly, analyst at Citigroup Global Markets in Chicago. "Better conditions will probably send prices down."

 

CBOT December corn fell 6 1/4 cents to US$2.49 a bushel.

 

Basse said if rains in the western corn belt fell and then those rains faded as it reaches the eastern region, that would be a perfect scenario. "That's a hard weather recipe," he said.

 

 

Soy

 

USDA said soybeans in good-to-excellent condition were unchanged from the previous week, at 67 percent. Analysts said soybeans still have time to improve condition ratings, which were a bit under expectations of a one to two percentage-point increase.

 

Illinois soybeans are rated 68 percent good-to-excellent-condition, up one percentage point from last week.

 

"Beans have really just gotten off to a start on crop conditions," said Reilly, who expects soybeans to open up "steady" Tuesday in response to the report.

 

CBOT November soybeans slid 12 cents to US$5.94 1/2 a bushel on Monday.

 

"Soybeans are a crop of August," said Basse, and the crop could be fine with rain in July. Soybeans usually set yield potential in August.

 

However, the disparity in weather conditions in soybean growing region could lead to incongruent yields from region to region. The western corn belt has experienced dryness lately, while the eastern part is soggier.

 

"The key going forward is the weather," he said. "There (are) differences of soil moisture and crop conditions that equal out to something that's mediocre."

 

He added that Indiana and Ohio crops would benefit from warm, sunny weather. Indiana's soy crop rose two percentage points in the good-to-excellent condition rating from the previous week's report to 59 percent.

 

Ohio's good-to-excellent rating remained the same at 58 percent. Illinois rose one percentage point to 68 percent, as did Iowa, to 75 percent.