July 23, 2008

US Crop Progress Wrap: Corn, soy development lags

 
The portion of the US corn crop rated good or excellent climbed in the week ended Sunday, but silking of the crop remained well below average, according to the US Department of Agriculture's weekly progress report issued Monday (July 21).

 
Blooming of the US soy crop similarly remained well below average, while the good-to-excellent condition increased two percentage points.

The amount of US spring wheat rated in good-to-excellent condition climbed in the week ended Sunday, while heading of the crop rose above the five-year average. The US winter wheat crop harvest grew in the prior week but remains below the five-year average.
 

"Bottom line, I don't see anything from the crop report in itself to turn around the decline in prices," said Arlan Suderman, an analyst with Farm Futures.

He added the report does "leave the door open for problems later in the season" that would be bullish.

The USDA said silking of the US corn crop stood at 34 percent in the week ended July 20, up from 13 percent the previous week but below the five-year average of 60 percent.

"We're not making progress and now we have temperatures moderating again in the Midwest, and that's certainly not going to help us gain any ground," Suderman said. "At this point just a normal freeze would be a threat to this crop."

 
In Iowa, the top corn-producing state, 14 percent of the corn crop was silking, up from 1 percent the preceding week but below the average of 53 percent.
 

In Illinois, 55 percent of the crop was silking, up from 14 percent the previous week but below the average of 85 percent.
 

The USDA said the good-to-excellent condition rating for the US corn crop was 65 percent, one percentage point above the preceding week, in line with the expectations of traders, who estimated the percentage would remain steady or climb up to three percentage points.

"I think its very interesting to note that our yield is 2.6 bushels per acre under last year's number and our crop ratings are now 3 percent above last year," said Brian Hoops, president of Midwest Market Solutions. He said that discrepancy suggests that "yields will be bumped up later on."
 

In Iowa, 62 percent of the crop earned the good-to-excellent condition rating, four percentage points above the preceding week.

In Illinois, the good-to-excellent condition rating for the corn crop was 68 percent, up three percentage points from the preceding week.

 
The USDA said 45 percent of the US soy crop has bloomed, up from 26 percent the prior week but below the five-year average of 65 percent.

"I think a lot of traders would have expected more rapid blooming than what we've got," Suderman said.
 

He said the pace isn't slow enough to rule out good yields, "it just kind of keeps us hanging in the balance."
 

In top soy producer Iowa, blooming of the soy crop stood at 53 percent, up from 35 percent the preceding week but below the average of 75 percent.

In Illinois, 39 percent of soy was blooming, up from 24 percent the previous week but below the average of 73 percent.

 
The USDA said the good-to-excellent condition rating for the US soy crop was 61 percent, up from 59 percent the previous week. Traders had expected a one- to two-percentage point rise in the good-to-excellent condition rating.

The USDA said 71 percent of the US winter wheat crop was harvested, up from 62 percent last week but below the five-year average of 79 percent. The trade estimated 72 percent to 74 percent would be harvested.

"There isn't really anything in this report that is constructive or jumps out at me one way or another," Hoops said of the wheat numbers.
 

In Kansas, 100 percent of the winter wheat crop was harvested, up from 95 percent last week and above the average of 99 percent.
 

The USDA said the good-to-excellent condition rating for the US spring wheat crop was 63 percent, up two percentage points from the previous week.
 

Traders had expected anywhere from no change to a two- percentage point drop in the good-to-excellent condition rating.
 

Suderman said that while the report wouldn't provide new bearish pressure on the market, "it removes some of the impetus for turning things around that bulls had hoped for."
 

According to the USDA, 60 percent of North Dakota's spring wheat is rated good to excellent, one percentage point below the preceding week.

In Montana, 53 percent of the spring wheat crop is rated good to excellent, four percentage points below last week. The most drastic change, Suderman noted, was in Minnesota, where the good-to-excellent rating jumped to 84 percent, up from 73 percent the previous week.
 

The USDA said 95 percent of the US spring wheat crop was headed, up from 84 percent last week and above the five-year average of 94 percent.