July 24, 2007

 

US Crop Progress Wrap: Condition declines in corn, soy, wheat

 

 

US crop condition ratings for soybeans and corn declined one and two percentage points, respectively, in the week ended Sunday (July 22), despite beneficial rains in much of the Midwest in the past week, the US Department of Agriculture said Monday in its weekly crop progress report.

 

Spring wheat crop conditions also declined one percentage point in the crop condition ratings, while winter wheat harvesting figures finally reached the five-year average after lagging, the report said.

 

The US corn crop lost two percentage points in its condition rating from last week, falling to 62 percent in good-to-excellent condition. The decline was unexpected after beneficial rains and cooler temperatures in some of the drier areas of the Midwest, analysts said.

 

"In the states that have been dry, there's been some irreversible damage," said Dan Cekander, grain analyst with Fimat.

 

Parts of Michigan, Minnesota and South Dakota need additional moisture, and registered declines in crop ratings, Cekander said. Michigan lost nine percentage points, Minnesota 10 percentage points and South Dakota eight percentage points in good-to-excellent ratings.

 

However, with corn late in its developing stages and much of the crop thought to be "made" already, analysts don't expect the market to react much to the decline.

 

"Since the declines weren't anywhere other than the northwest, I don't think the market's going to react to that at all," said Jim Smitherman, president of Harvest Trading Group in Austin, Texas. "If the bulls were looking for some hope here, they're not going to find it in a two percentage-point decrease."

 

The three major corn producing states saw increases in crop conditions or remained unchanged this week. Illinois gained two percentage points, Indiana rose five percentage points and Iowa was unchanged.

 

Also, corn remains ahead in its silking and dough stages, the report said, with 78 percent of the crop in its silking stage ahead of the five-year average of 62 percent, and 14 percent of the crop in its dough stage ahead of the five-year average of 11 percent.

 

"We've been ahead in the pollination for the last month," Smitherman said. "This crop is far on its way to being a good crop."

 

The USDA reported soybeans lost one percentage point in their condition ratings, with 61 percent of the crop in good-to-excellent condition despite beneficial rains in the Corn Belt last week, analysts said.

 

Soybean crop conditions were expected to be unchanged to slightly higher, analysts said.

 

Similarly to corn, the northwestern states of the Midwest declined in crop rating conditions because of continuing dry weather, Cekander said.

 

"I thought there was a perception that Wisconsin had kind of filled in its dry areas," he said.

 

However, Wisconsin dropped 16 percentage points in its crop conditions from last week, with 54 percent of its crop in good-to-excellent condition. South Dakota fell 12 percentage points, leaving 70 percent of its crop in good-to-excellent condition.

 

In crop progress, 75 percent of the national soybean crop is blooming, compared to 74 percent last year and 67 percent on a five-year average. Also, 30 percent of the crop is setting pods, on par with 30 percent last year and ahead of 24 percent on a five-year average.

 

Smitherman said the market is already aware of the fast pace of soybean development and that the numbers should not be a focus in Tuesday's s market.

 

"I think that forecast will still overshadow the report," he added. "These numbers just aren't going to give the market any direction at all."

 

US spring wheat crop conditions declined one percentage point to 75 percent of the crop in good-to-excellent condition, in line with analysts' predictions, Cekander said.

 

Spring wheat conditions have been declining in recent weeks but still remain at high levels, he said.

 

States with too little moisture and warmer temperatures saw a decline in crop conditions this week, analysts said. South Dakota lost four percentage points with 75 percent of its crop in good-to-excellent condition, while Montana lost three percentage points with 62 percent of its crop in good-to-excellent condition.

 

Cekander doesn't expect the small decline to attract any focus in Tuesday's market as the crop remains in good condition.

  

After lagging in harvesting percentage due to adverse weather in the Plains and Texas, the US winter wheat harvesting average has finally met up with the five-year average, the USDA reported. Eighty-one percent of the national crop is reported as harvested, up from 70 percent last week, but behind last year's figure of 85 percent.

 

"I think everything in wheat was right in line with analysts' expectation," Cekander said. Drier weather conditions have allowed for farmers to get into the fields and harvest their crops.

 

However, Oklahoma is still reported with only 83 percent of its crop harvested, down from 100 percent both last year and its five-year average, while Texas only has 92 percent of the crop harvested, down from 100 percent both last year and as its five-year average.

 

While some yields have been damaged because of too much moisture in the fields, Cekander said he still expects farmers to finish harvesting because of the lofty levels of current wheat prices.