June 20, 2006

 

US crop progress wrap: soy and corn ratings flat

 

 

US corn and soybean crop condition ratings from the US Department of Agriculture weekly crop progress data Monday (Jun 19) remained generally unchanged from last week's ratings, and were close to trader expectations.

 

Analysts said weather forecasts for the next pivotal weeks of the growing season will influence market direction, which is generally the case at this time of year.

 

 

Corn

 

The USDA reported that 68 percent of the US corn crop is in good-to-excellent condition, down two percentage points from last week.

 

"The deterioration in the corn would reflect dry weather preceding the week," said Bill Nelson of director of research at A.G. Edwards, who noted that the estimate may have been taken before weekend rainfall.

 

"These aren't large adjustments, probably not too different than what traders expected," he said. "Because the numbers aren't that much different from expectations, we see that the real focus is on the weather."

 

The fate of top-producing states such as Indiana, Ohio, Iowa and Illinois will depend upon precipitation and temperatures. DTN Meteorologix weather firm said thunderstorms over the weekend helped parched western corn belt regions and recent warmer weather will help developing crops.

 

Looking forward, temperatures and precipitation are forecast near average for both the western and eastern corn belt.

 

Indiana rose three points to 56 percent in good-to-excellent condition, while Illinois did not change in that category, and Iowa fell five percentage points.

 

"Moving into the month ahead of the reproductive stage, expectations are wholly dependent on how the weather turns out," Nelson said.

 

Dan Basse, analyst at Ag Resource Co, agreed with Nelson that the weekend rains probably were not taken into account in this week's readings. He noted the corn report was "in line with expectations," as the conditions are the same as last year's numbers as well as the 10-year average.

 

"If we can get some decent (precipitation) coverage in the areas that missed rain over the weekend, I predict corn and soybean ratings to edge up next week," he said.

 

 

Soybean

 

The USDA reported that 67 percent of the US soybean crop is in good-to-excellent condition, the same numbers as last week.

 

Both Ohio and Indiana crop ratings increased slightly in good-to-excellent conditions, while Illinois and Iowa dropped a few points.

 

"Most of us were looking for a modest one to two (percentage-point) decline in good to excellent," Basse said. "It won't have much of an impact on soybean market."

 

He noted that 67 percent good-to-excellent conditions in soybeans are equal to 2004's rating, but still well above the 10-year average.

 

"Because the numbers aren't that much different from expectations, we see that the real focus is on the weather," Nelson said.

 

Lower numbers in the Delta region, he said, reflect dryness in the area.

 

Ninety-seven percent of soybeans are planted, up three percentage points from last week's numbers and the five-year average, according to USDA. Ninety-two percent of soybeans have emerged, up 8 percent from last week and six percentage points above the 10-year average.