June 30, 2009

US soy and corn crop ratings improved as of Sunday (June 29), exceeding the expectations of analysts looking for some deterioration from last week's heat wave in the central US, according to the US Department of Agriculture's weekly crop-progress report released Monday (June 29).

 

Meanwhile, spring wheat conditions slipped as anticipated, and the US winter wheat harvest continued to progress.

 

The USDA rated 68 percent of the crop as good-to-excellent, up one percentage point from last week. US soy crop conditions were expected to be down one to two percentage points in the combined good and excellent categories.

 

The improvement in the soy rating was impressive, particularly with the crop rated at pretty high levels for this time of year, said Mario Balletto, analyst with Citigroup in Chicago.

 

Soy plantings were 96 percent complete as of Sunday, compared with 95 percent last year and the five-year average of 98 percent, the USDA said. That was in line with trade expectations.

 

The planting pace continues to lag, but what has been planted is developing well, Balletto said.

 

States like Illinois and Indiana continued to lag behind planting progress this season. Illinois was 88 percent planted, compared with 96 percent last year and the average of 99 percent. In southeastern Illinois, only 68 percent of the crop is planted, and 75 percent is planted in southwestern Illinois, according to the USDA. Indiana was 94 percent planted, compared with 95 percent last year and the average of 99 percent, while Iowa plantings were near completion. The crop was 99 percent seeded, up from 97 percent last year and the average of 99 percent.

 

Overall, the crop was 91 percent emerged, compared with 52 percent last year and the average of 70 percent, according to the USDA. A week ago, 95 percent of soy had emerged.

 

Iowa's crop was 97 percent emerged, compared with 91 percent last year and the average of 98 percent. In Illinois, emergence was 76 percent, compared with 88 percent last year and the average of 96 percent.

 

The crop was 5 percent blooming, compared with 5 percent last year and the average of 10 percent, according to the USDA.

The USDA said 72 percent of US corn is in good-to-excellent shape, up two percentage points from last week. Traders surveyed by Dow Jones Newswires anticipated one- to two-percentage-point declines in ratings. Last week, 70 percent of the crop was rated good-to-excellent.

Traders had expected last week's extreme heat would cause the crop to look more ragged.

Heat in the Midwest last week improved conditions to the surprise of some, but it is nothing to get excited about and, overall, the report was neutral to the market, said Jerry Gidel, analyst with North America Risk Management Services.

Four percent of the US corn crop was silking as of Sunday, just below last year's 5 percent and the average of 8 percent, the USDA said.

The USDA said 76 percent of US spring wheat crop is in good-to-excellent shape, down one percentage point from last week. That was in line with trader expectations of a one- to two-percentage-point decline in ratings. Last week, 77 percent of the crop was rated good-to-excellent.

The crop was 15 percent headed, down from 26 percent last year and the average of 40 percent.

In North Dakota, the biggest spring wheat-growing state, none of the crop is headed, compared with 22 percent last year and the average of 35 percent, according to the USDA.

There were no big surprises for spring wheat, with the marketplace expecting lagging development in the face of a slow start to the planting season, Balletto said.

Winter wheat was 40 percent harvested as of Sunday, compared with 36 percent last year and the average of 46 percent. A week ago, 20 percent of the crop was harvested. The USDA rated 45 percent of the crop as good-to-excellent, unchanged from last week. US winter wheat crop conditions were expected to be unchanged to down two percentage points in the combined good and excellent categories.

The combination of the unchanged crop ratings and harvest confirmed the price weakness in Chicago and Kansas City wheat futures Monday, Balletto said.

In Kansas, the top hard red winter wheat-growing state, 52 percent of the crop was rated good-to-excellent, up four percentage points from the previous week, according to the USDA. HRW wheat is used to make bread.

Ohio's soft red winter wheat crop was rated 76 percent good-to-excellent, up two percentage points from last week, the USDA said. SRW wheat is used to make pastries and snack foods.

In Illinois, SRW wheat was rated 49 percent good-to-excellent, up one percentage point from last week.

Missouri's good-to-excellent rating held steady at 44 percent, and Indiana's wheat was rated 64 percent good-to-excellent, down four percentage points from the previous week.

There was no surprise in the winter wheat ratings, but the slight improvement in Illinois' SRW wheat crop was encouraging after talk of some crop issues in Illinois and Indiana, Gidel said.