August 14, 2007

 

US Crop Progress Wrap: Crop conditions unchanged for corn, soy

 

 

US corn and soybean crop conditions remained unchanged in the week ended Aug. 12 as some Midwestern states benefited from rains and others suffered from heat, said the US Department of Agriculture in its weekly crop progress report.

 

Also, US spring wheat crops saw a condition rating decrease as crop harvesting continues and hot, dry weather conditions make an impact.

 

The USDA reported US corn conditions unchanged from the previous week with 56% of the crop in good-to-excellent condition.

 

"The recent rains have been helping stabilize the crop," said Dax Wedemeyer, analyst with US Commodities in West Des Moines, Iowa.

 

Michigan and Pennsylvania crop conditions both increased 11 percentage points from the previous week, with 23 percent of Michigan's crop and 52 percent of Pennsylvania's crop in good-to-excellent condition. Other western Corn Belt states also saw some improvements including Nebraska, North Dakota and South Dakota.

 

The northwestern Corn Belt received some relief from its drought-like conditions in last week's rains, said Monica Riley, analyst with Alaron Trading in Chicago.

 

However, hot temperatures in the southern Corn Belt in recent weeks caused some crop conditions to decline, analysts said.

 

Tennessee lost three percentage points with 14 percent of the crop in good-to-excellent condition and Kentucky lost 10 percentage points with 54 percent of the crop in good-to-excellent condition.

 

US corn progress is ahead of the five-year doughing average at 66 percent compared to 53 percent, as well as the dented average at 24 percent, compared to 18 percent.

 

"The warm temperatures are helping push the corn progress ahead of normal," said Bill Nelson, analyst with A.G. Edwards.

 

Analysts expect Chicago Board of Trade corn prices to find some pressure from the crop progress report because traders and analysts were mostly expecting a decline in condition ratings.

 

"It's probably a market that may have been looking for a little bit lower," Nelson said. "So this might be negative for prices."

 

US soybean ratings were unchanged with 56 percent of the crop in good-to-excellent condition, the USDA reported.

 

Similarly to corn, portions of the Midwestern crop were improved with beneficial rains, while other portions suffered from above-average temperatures, analysts said.

 

Southern regions of the Midwest suffered from intense heat with Tennessee losing nine percentage points in its crop rating, leaving 18 percent of the crop in good-to-excellent condition and Kentucky losing 18 percentage points, leaving 46 percent of the crop in good-to-excellent condition.

 

Midwestern rains did help states like Michigan that gained 13 percentage points in its good-to-excellent rating, but weren't as beneficial in other places as one analyst had expected.

 

"I had thought we had covered Illinois and Indiana pretty well rain-wise in the past week," Riley said.

 

However, both Illinois and Indiana saw declines of six and four percentage points, respectively.

 

Even though overall crop conditions did not improve, Wedemeyer said: "August for the most part has been fairly decent (for soybeans) minus a few spells of heat. For the most part we've had a pretty good start."

 

With cooler weather and additional rains, Wedemeyer said the soybeans could reach a yield between a 41 and 45 bushels per acre. However, Nelson expects the USDA's August yield estimate of 41.5 bushels from last week's crop production report to be slightly optimistic because additional heat could continue to add stress to the crop.

 

Soybeans are ahead of average progress with 84 percent pod setting, compared to 77 percent on a five-year average.

 

Analysts expect soybean prices to fall slightly since analysts and traders were expecting a decline in crop ratings.

 

Considering CBOT soybeans strong close Monday, Nelson expected prices to sag a little Tuesday before the market turns its attention to the weather forecasts.

 

"There wasn't anything startling in this (report) and that really shifts attention back to what's happening with the weather this week," Nelson said.

 

The US spring wheat crop lost three percentage points in its crop condition rating from the previous week with 66 percent of the crop in good-to-excellent condition.

 

Dry conditions in Montana pushed crop conditions to 31 percent in good-to-excellent condition from 46 percent the previous week. Idaho also lost five percentage points while North Dakota lost two percentage points.

 

"A few states have been having drought problems, and that's where the deterioration was," Riley said.

 

Harvesting improved from last week with 51 percent harvested from 29 percent last week, 66 percent last year and 36 percent on a five-year average. As harvesting progresses, crop rating conditions traditionally decrease, analysts said.

 

"If anything this is slightly friendly, but I'm not sure that they will run with it (in Tuesday's trading)," Riley said. She doesn't expect crop rating conditions to draw attention with the crop so far along in harvesting progress. Instead, traders will turn their focus to developing foreign crops, Riley said.

 

The USDA reported the winter wheat crop 97 percent harvested, up from 94 percent the previous week.

 

The winter wheat crop suffered from a later harvest because of adverse weather earlier in the year, Wedemeyer said, but those yields are already figured into the market since the USDA crop production and supply-and-demand report was released Friday.

 

"Yields are pretty much accounted for and now they're moving on to the rest of the world to see what they're doing," Wedemeyer said.

 

However, Texas is still lagging behind its harvesting average with only 97 percent of its crop harvested compared to 100 percent on a five-year average. Cool, wet weather has delayed the harvesting in the state.