July 27, 2004

 

 

U.S. Corn, Soybean Ratings Improve Again

 

Corn and soybean crops across the Midwest continue to prosper as the lack of threatening weather conditions remained beneficial for overall crop development, the U.S. Department of Agriculture said Monday.

 

The good-to-excellent rating of spring wheat crops improved in the week ended July 25, showing crops have fared well. The USDA reported the winter wheat harvest was drawing to a close.

 

CORN

 

"Each day and week that passes by with ratings and conditions holding steady or improving is saying to the market that the corn crop is large," said Don Roose, president of U.S. Commodities in West Des Moines, Iowa. Historically, the second week of July signals a peak in ratings as the crop matures, but with one week remaining in the month the crop is continuing to improve, Roose added.

 

USDA reported that 77% of the U.S. corn crop was in good-to-excellent condition, a 1-percentage-point improvement from the previous week. Seventy- two percent of the crop was silking, up from the previous week's 50% and above the five-year average of 69% silking. Nineteen percent of corn had reached the dough stage, compared to 9% last year and the five-year average of 12%, the report said.

 

Mike Zuzolo of Risk Management Commodities Inc. in Lafayette, Ind., said the report will not have a large impact on prices, but it does show the crop is not deteriorating. However, he points out that with top-rated crops in the growing areas of Minnesota, Michigan, Ohio and Wisconsin below 70%, traders may begin to question if private estimates of an 11-billion-bushel crop with a yield of at least 150 bushels an acre is realistic.

 

SOYBEANS

 

USDA reported 69% of the U.S. soybean crop was in good-to-excellent condition, up 1 percentage point from the previous week. Seventy-four percent of the crop was reported blooming, up from the previous week's 59% and modestly above the five-year average of 70%. Thirty-two percent of soybean crops were reported setting pods, compared to 18% last year and the five-year average of 27%, according to the report.

 

The soybean story is still being written, and looking back to last year the market is aware of how much things can change in August, Roose noted. The 69% good-to-excellent rating is respectable, but bean yields can change a great deal from now through the next few weeks, particularly with the upper Midwest possessing a lot of immature beans, Roose added.

 

Minnesota, Michigan and Wisconsin are all lagging in development compared to last year and the five-year average.

 

Zuzolo said that despite the modest improvement in the top-rated categories, soybeans are showing more double-digit figures in the "very poor" to "poor" ratings, particularly in Minnesota, Ohio, Michigan and Wisconsin.

 

SPRING WHEAT

 

The spring wheat crop improved in the previous week, jumping 2 percentage points in the good-to-excellent ratings to 70%. Last year 60% of the spring wheat crop was reported in the top-rated categories. Analysts anticipated condition ratings would show steady improvement based on recent weather conditions.

 

The improvement in spring wheat's good-to-excellent rating proves the crop has benefited from favorable weather conditions and illustrates why wheat prices continue to struggle, Roose added.

 

Ninety-three percent of spring wheat crops were reported headed, according to USDA. The figure is up from last week's 87% but trailed last year's and the five-year average of 96% and 94%, respectively.

 

WINTER WHEAT

 

The winter wheat harvest continues to move along fairly well with major producing states mostly complete. Overall, USDA reported 83% of winter wheat crops had been harvested, with the key states of Kansas and Oklahoma done.

 

However, there is still quite a bit of winter wheat acres left to be combined in the Plains, and the unharvested crops that received heavy rains of late could see a drop in quality, Zuzolo noted.

 

Fifty-six percent of South Dakota's winter crops were harvested. Colorado's harvest was 94% complete, Michigan crops were 58% cut and Nebraska's winter harvest was 92% done.