September 4, 2008

 

 

US corn and soy conditions continued to deteriorate last week amid dryness in some areas of the Midwest, and the crops remain behind schedule, according to the USDA on Tuesday (September 2).

 

The crops remain vulnerable to early frosts, as development continues to lag the normal pace, analysts said. The spring wheat harvest, meanwhile, continues to make solid progress thanks to favourable weather.

 

"The crop potential for both corn and soy is heading south and I think the crop conditions continue to reflect that," said Joel Karlin, analyst for Western Milling.

 

The USDA said 61 percent of the US corn crop was in good-to-excellent condition as of Sunday, down from 64 percent last week. Traders had expected the rating to drop 1 to 3 percent. The decline was not surprising, Karlin said.

 

Although parts of the northwestern corn belt saw rain last week, other areas suffered through an especially dry August.

 

The crop has "really sort of dried down," Karlin said. Only 44 percent of the Ohio crop is rated good to excellent, down from 48 percent last week.

 

Iowa's crop was rated 63 percent good to excellent, down from 65 percent last week, while Indiana's crop was rated 59 percent good to excellent, down from 64 percent last week. Illinois, whose good-to-excellent rating actually climbed in the last report, fell in Monday's report, to 68 percent from 74 percent. Minnesota's crop improved to 64 percent good to excellent, up from 62 percent a week ago.

 

Development continues to lag behind normal. Eighty-three percent of the crop was in the dough stage of development, up from 68 percent last week but below the five-year average of 91 percent.

 

In Iowa, 75 percent of the crop was in the dough stage, up from 53 percent last week but below the five-year average of 90 percent.

 

The crop was 45 percent dented, up from 26 percent last week, but below the average of 65 percent. In Iowa, 33 percent of the crop was dented, up from 13 percent last week but down from the average of 64 percent. Karlin added that "late plantings and the dry August are not the best for maintaining ear weights."

 

Meanwhile, the USDA rated 57 percent of the soy crop as good to excellent, down from 61 percent last week. Traders had expected the score to drop 1 to 3 percent.

 

Indiana's crop saw a significant drop to 49 percent good to excellent, down from 59 percent last week. Areas of the eastern corn belt have been particularly dry.

 

In Iowa, 62 percent of the crop was seen as good to excellent, down from 63 percent last week. The Illinois crop was rated 62 percent good to excellent, down from 68 percent last week.

 

The USDA said 94 percent of the crop was setting pods, down from 98 percent last year and the average of 97 percent. Ninety-five percent of Iowa's crop was setting pods, below 100 percent in 2007 and the average of 99 percent.

 

Analysts said that at this point both corn and soy need to avoid an early frost, but that even a normal frost will likely cause crop damage. The crops also need some rain, although Karlin questioned how much benefit the crops will see from the remnants of Hurricane Gustav at this stage of the growing season.

 

"I think at this point the rains are going to be more beneficial for soy than corn," he said.

 

For the US spring wheat harvest, 81 percent has been completed, down from 93 percent in 2007 and the 83-percent average. Last week, 61 percent of the crop was harvested.