September 1, 2009

US soy and corn crops continue to sustain high crop ratings, but development still lags behind, according to US Department of Agriculture's weekly crop progress report released Monday (August 31).

 

Meanwhile, spring wheat ratings had solid improvements, while harvest continues to progress slowly.

 

The USDA rated 69 percent of the US soy crop as good-to-excellent, unchanged from last week. US soy crop conditions were expected to hold steady or decline by 1 percentage point in the combined good and excellent categories.

 

The continued high ratings are not shocking, as the immaturity of the crop is holding the ratings higher longer than in previous years, said Don Roose, president of US Commodities. The crop is probably 10 to 14 days behind in development, Roose said.

 

Ninety-three percent of the crop was reported setting pods, on par with last year, but below the five-year average of 96 percent. In Iowa, 97 percent of the crop is setting pods, just below the average of 98 percent. Meanwhile, in Illinois 91 percent of the crop is setting pods, below the average of 98 percent.

 

Three percent of the crop is dropping leaves, according to the USDA.

 

The report is a reflection of a late maturing crop, with soy as a whole probably needing to get through mid-October before encountering a hard freeze to reach their potential, said Mario Balletto, analyst with Citigroup Global Markets Inc.

 

Agronomists see the crop straddling the edge between disaster and bounty going into September.

 

"The crop needs warmer, sunny and drier conditions to reach potential," said Vince Davis, extension agronomist with University of Illinois, who adds a September frost would be "devastating."

 

"Illinois soy is in uncharted territory in 2009, particularly with late developing crops a bigger percentage than seen before," Davis said.

 

USDA said 69 percent of US corn is in good-to-excellent shape, down 1 percentage point from last week. Traders surveyed by Dow Jones Newswires anticipated conditions would hold steady or drop by 2 percentage points.

 

The crop continues to hold onto high crop ratings, but that was expected based on lagging development of the crop, Balletto said.

 

Seventy-five percent of the crop was reported in the dough stage, down from 81 percent last year, and below the five-year average of 88 percent.

 

USDA said 32 percent of the crop was in the dent stage, down from 42 percent last year and the five-year average of 60 percent. Five percent of the US corn crop was mature as of Sunday, just below last year's 6 percent, and below the average of 13 percent, the USDA said.

 

The corn crop still has the issue of late development and with need to avoid a freeze in September, Balletto said. The development pace remains a risk, otherwise conditions are pointing to a really good crop if it's allowed to finish ahead of a freeze, Balletto said.

 

"What we have here is a large immature corn crop," Roose said. The crop still looks like it's the first week in August, meaning it will be a race to finish in order to avoid frost or a hard freeze, Roose added.

 

USDA said 75 percent of US spring wheat crop is in good-to-excellent shape, up 3 percentage points from last week. That was above trader's expectations of a steady to 2 percentage point decline in ratings.

 

"A three percentage point jump in spring wheat condition ratings is surprising for this time of year," said Balletto. However, due to late plantings and cool, wet conditions this growing season, the crop is maturing behind schedule like corn and soy, Balletto said.

 

The crop was 38 percent harvested, down from 78 percent last year and the average of 79 percent.

 

In North Dakota, the biggest spring wheat-growing state, 22 percent of the crop is harvested, compared with 78 percent last year and the average of 76 percent, according to the USDA.

 

The harvest is really late, but in line with the delays seen in spring plantings, Balletto added.