August 1, 2006

 

US crop progress wrap: corn, soy conditions down

 

 

US corn and soybean crop conditions declined in ratings released by the US Department of Agriculture Monday (Jul 31), though the drop was slight and in line with analysts and grain traders expectations.

 

 

Corn

 

The USDA reported 56 percent of the US corn crop is in good-to-excellent condition for the week ending Jul 30, down 3 percentage points from the week prior. The trade had expected a 1 to 3 percentage-point decline in corn.

 

The report is supportive and will cause bullish traders to add premium into the market, said Dax Wedemeyer, analyst and broker at US Commodities.

 

Illinois corn was unchanged from previous week at 69 percent in good-to-excellent condition. The Indiana crop increased 1 percentage point at 67 percent in the same category, and Ohio crop conditions improved 1 percentage point to 69 percent. Iowa corn fell 5 percentage points to 57 percent in good-to-excellent condition.

 

Analysts say above-normal warm weather is causing the crop to mature more rapidly than normal, which could put production in danger.

 

"We see the crop as being pushed," said Dan Basse, president of AgResource Co. "Whenever you push a crop, it's always to the detriment of yield."

 

Silking progress is at 91 percent in the 18-state average, up 13 percentage points from last week. This week's silking numbers are 9 percentage points above the five-year average and 13 percentage points higher than last year at the same time.

 

Doughing in the US corn crop climbed 12 percentage points to 25 percent. This is the highest doughing level since 1985, comparable to 29 percent doughing at this point in 1987, Basse said.

 

Five percent of the US corn crop is dented, compared to the same percentage in the 5-year average and 4 percent at this time in 2005.

 

"Once you get into the dent, it's hard to affect yield," Basse said.

 

 

Soybeans

 

The USDA reported 53 percent of the US soybean crop is in good-to-excellent condition, down 1 percentage point from last week. Traders had expected a 1 to 3 percentage-point decline in soybeans. Western Midwest numbers were expected to fall, while eastern Midwest improvements were expected to limit overall declines, analysts said.

 

The differences in condition between soybean-producing states are geographically evident, Basse said, using the Mississippi River as a dividing line between the eastern and western corn belt.

 

"Mother Nature has not been too kind to people west of the river," he said.

 

Most major soybean-producing states improved in the good-to-excellent range, with the Illinois crop up 3 percentage points at 67 percent good to excellent; Indiana soybean up 2 percentage points at 66 percent; and Ohio soybeans up 2 percentage points at 62 percent in the same category. Iowa's crop fell 6 percentage points with 55 percent rated in good-to-excellent condition.

 

"The good areas definitely outweigh the bad ones in terms of production," Wedemeyer said.

 

However, soybeans still have at least three weeks to improve with the right weather as soybeans generally pollinate during August. Pollination is when crops set optimal yield potential.