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July 10, 2007


US Crop Progress Wrap: Corn, soybean rating slightly down



Crop condition ratings for US corn and soybeans both declined three percentage points in the week ending Sunday (July 8), while winter and spring wheat made progress in harvesting and heading, said the US Department of Agriculture (USDA) on Monday (July 9) in its weekly crop progress report.


The US corn condition ratings fell to 70 percent good-to-excellent from last week's 73 percent due to drier weather in the western Midwest, analysts said.


"We had some deterioration up in the northern Corn Belt and other slight decreases system wide," said Shawn McCambridge, a grain analyst with Prudential.


Indiana and Iowa each lost four percentage points to total 51 percent and 72 percent of the crops in good-to-excellent condition, respectively. However, Illinois gained two percentage points to have 81 percent of its crop in good-to-excellent condition.


Analysts expected ratings to decline by 1 to 3 points.


"This was kind of expected because of the weather we had during this report period," McCambridge said.


The USDA also reported corn as ahead in the silking process at 32 percent silking, versus 13 percent last week and an 18 percent five-year average. The silking stage is the beginning of the corn plant's reproductive cycle. This is when the crop sets yield potential.


Analysts disagree on whether the fast progress means the crops are experiencing stress.


"The progress of the crop is pretty impressive," McCambridge said. "The crop is developing very nicely and very rapidly."


By contrast, Dax Wedemeyer, a grain analyst with US Commodities in West Des Moines, Iowa, said the crop is under stress from high temperatures.


"The weather over the last week was pretty stressful on a lot of the crop," Wedemeyer said, adding that corn crops need moisture to avoid further rating deterioration.


US soybean ratings fell to 65 percent of the crop in good-to-excellent condition down from 68 percent last week, the USDA reported. Dry weather in the western Midwest hurt conditions, analysts said.


Illinois gained three percentage points, with 76 percent of the crop in good-to-excellent condition, but Indiana lost four percentage points, with 72 percent in good-to-excellent condition, and Iowa lost one percentage point, with 45 percent in good-to-excellent condition. Michigan and Minnesota also lost 6 and 8 percentage points, respectively.


Despite the loss, analysts said crop conditions are still good and shouldn't attract much focus in the market because soybeans still have time to develop.


However, additional rain is needed in the coming week to prevent conditions from worsening.


The market "will really be focused on whether or not this next rainfall event hits the needed areas," McCambridge said.


Soybean blooming saw improvements gaining 21 percentage points from last week to 40 percent blooming versus 36 percent last year.


Winter wheat harvesting improved 18 percentage points from last week to 58 percent harvested, but still trails 70 percent harvested last year and 65 percent for a five-year average.


Oklahoma has 69 percent of its crop harvested versus 59 percent last week, 100 percent last year and 99 percent on a five-year average. Kansas has 81 percent of its crop harvested versus 59 percent last week, 98 percent last year and 96 percent on a five-year average. Texas has 81 percent of its crop harvested versus 68 percent last week, 98 percent last year and 95 percent on a five-year average.


"It's not going to take them long to finish up, it's just going to be a matter of getting out there and staying in the fields for any length of time," McCambridge said.


Harvesting has been delayed and because of excessive moisture in the Plains, which has potential to damage yields.


"They're expecting some pretty good yield loss," Wedemeyer said.


The crop condition lost one percentage point in its good-to-excellent rating; however, condition ratings late in the season are "pretty much irrelevant," McCambridge said.


He says he thinks the market has already factored in the harvest concerns but will wait to see what the yield loss will be before adjusting prices.


Spring wheat crop ratings lost one percentage point to total 78 percent of the crop in good-to-excellent condition, the USDA reported.


"It had some fairly good weather compared to the winter wheat," Wedemeyer said.


Minnesota and Montana did see losses of 11 and 7 percentage points, respectively; however, North Dakota which produces just below half of the US spring wheat crop, remained with 88 percent of its crop in good-to-excellent condition.


Modest production losses in western areas would be offset by very good conditions in central areas, McCambridge said.


Crop progress is normal to ahead with 82 percent of the total US crop headed, up from 61 percent last week, down from 84 percent last year but up from 70 percent on a five-year average. "The crop is developing along at a scheduled pace," McCambridge said.


Again, crop ratings are already thought to be factored into the market. Analysts predicted crop rating conditions to be unchanged to three points lower.


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