July 7, 2004

 

 

US Corn, Soybeans In Good Shape

 

With the weather remaining beneficial for growth, corn and soybeans are in strong shape in their crop condition ratings, according to the U.S. Department of Agriculture's crop progress report, released Tuesday afternoon. Corn condition improved by two percentage points and soybeans by one percentage point, with some of the worrisome states catching up.

 

If weather conditions turn brutal heading into the key corn pollination time frame, then corn and soybean crop conditions could fall. But ideal weather conditions could further improve the already stout crops, analysts said.

 

With 60% of the winter wheat crop harvested, USDA is no longer releasing a crop condition report. Spring wheat conditions decreased by two percentage points.

 

CORN

 

U.S. corn conditions improved by two-percentage points from the previous week, rated at 71% good to excellent. The poor-to-very poor category decreased one percentage point, to 7%, from the previous week.

 

"You can't get much better than that," said John Kleist, of John W. Kleist Consulting.

 

Corn has been on target to produce a huge crop, Kleist said. It would take an extended period of severe weather for corn to turn for the worse.

 

"(Corn) is in good shape at the time it needs to be in good shape," Kleist said. Considering the weather conditions on the calendar, "it would take something not obvious to turn the tide."

 

A forecast of 90-degree temperatures is approaching and means two things to corn, Kleist said. First, the weather will be hot and damp, not hot and dry. Second, 90 degrees in July is not unusual.

 

"Corn is gonna love it," Kleist said.

 

Corn has begun the doughing state, with 2% of the U.S crop at this stage, which is the same as last year and the five-year average. Nineteen percent of the crop is in silking stage.

 

The crop is "well in line" with doughing, Kleist said. To continue on track with the process, warm, damp weather conditions would be ideal and seem to be in the weather forecast.

 

Meanwhile, on the market, Dan Basse, analyst with AgResource, said this report is "neutral to negative." He does not see it moving the market much either way.

 

SOYBEANS

 

Soybean conditions also saw little change, with the good to excellent ratings increasing by one percentage point, to 67%. This is still three percentage points lower than last year's good to excellent condition. The poor to very poor condition remained at 8%.

 

Weather has been remarkably good for soybeans, Kleist said. "It's on solid footing."

 

Soybeans are up 1% in the good to excellent rating, Kleist said. In general, Minnesota, Wisconsin and some of the northern states struggling with overly wet conditions have improved.

 

"The plant itself is in very good shape, but has a month to go," Kleist said. That is a critical timeframe for soybeans. Like July is a crucial time for corn, August affects soybeans.

 

Overall, soybeans are off to a good start, Kleist said. Currently, soybeans have a "solid base of heartiness."

 

Similar to the corn, it would take severe weather conditions to damage the crop, Kleist said.

 

Overall, this report is neutral to positive for the market, Basse said.

 

WINTER WHEAT

 

The focus for winter wheat has shifted from crop condition to harvest only.

 

"(The) focus is more on harvested than what is still in the field," Basse said.

 

The wheat crop production is expected to be down 20 million to 30 million bushels in the next USDA supply/demand report, he said. Basse explained that this will be a more accurate report because USDA can count actual harvested wheat, not just heads in a field.

 

"Harvest seems to be in line," Kleist said. "Kansas especially."

 

USDA reported Kansas harvest at 83% done, up from 69% the previous week.

 

The harvest conditions have not been a surprise, Kleist said.

 

"Quality will be a bigger issue than pace of harvest," Kleist said.

"It's continuing at a rapid pace set up a few weeks ago and it's well in line with the trade," Kleist said.

 

There have been several reports in Kansas and Nebraska about wheat sprouting due to recent rains.

 

SPRING WHEAT

 

U.S. spring wheat conditions decreased two percentage points, to 66%. The poor to very poor rating increased by two percentage points, to 10%.

 

Spring wheat is slightly lower in crop ratings, Kleist said. Some of the weather conditions were not ideal. Too much rain and relative coolness were the reasons for the slightly lower condition in the spring wheat crop progress report, Basse said.

 

Spring wheat is at an "okay state," with some spots that have more deterioration than others, Kleist said.

 

"Basically, the majority is still better than average," Kleist said.