PRINTABLE VERSION   EMAIL TO A FRIEND   RSS FEEDS 12:46 UK, 5th Aug 2014, by Agrimoney.com
Rains on their way for sagging US corn crop

Rains are on their way to resolve dryness which sent the condition of the US corn crop to its lowest of the season so far, depressed in some areas too by cool conditions up to 20 degrees Fahrenheit below normal.

Latest weather forecasts "are a little wetter from North Dakota to Wisconsin for the first week [of the outlook] while the second week has more rain for the eastern Midwest", Paul Georgy, president at Chicago broker Allendale, said.

Weather service MDA forecast that in the south west Midwest, one area where dryness has raised concerns, rains "this week will finally begin to replenish moisture for soybeans and late corn growth".

Rainfall will also "improve conditions in the north eastern and southern [Mississippi] Delta" region, although "some limited dryness will likely continue in the east central Midwest", including parts of Indiana and Ohio.

At Martell Crop Projections, Gail Martell said that "the forecast calls for at least 1.5 inches of rainfall in a wide swathe of the Midwest, but 2-4 inches locally affecting Iowa, central Nebraska, South Dakota, eastern Kansas and Missouri".

'Unusually cool temperatures'

The hopes for rains helped ease concerns over further deterioration in US corn crop, which was rated overnight by the US Department of Agriculture as being 73% in good or excellent condition, down 2 points week on week and the worst rating of the year if still a strong one historically.

The decline was particularly marked in Kentucky where, thanks to "unusually cool temperatures and dry conditions", the proportion of corn seen as good or excellent fell by four points to 62%, down 20 points in four weeks, with soybeans also suffering, recording a drop of 5 points to 61% in the rating.

"Normally once of the warmest times of the year, each day [last] week saw below normal temperatures," USDA scouts said, noting temperatures falling below 50 degrees Fahrenheit, 20 degrees below normal.

In neighbouring Tennessee, the proportion of soybeans viewed as good or excellent dropped 4 points to 75%, again with cool conditions cited as challenging crops.

'Dry conditions'

A dearth of rain caused some deterioration in more major producing states too, such as top producer Iowa, where the proportion of corn rated good or excellent eased 1 point to 77% amid "unseasonably cool and mostly dry weather".

The soybean crop remained stable at 74% good or excellent.

However, in neighbouring Illinois both corn and soybeans saw mild deteriorations as "dry conditions continued throughout the state", with rainfall averaging 0.28 inches last week, 35% of typical levels for the time of year.

In Nebraska, another top-5 corn and soybean producing state, "another week of only scattered rainfall stressed dryland crops and pastures", causing deterioration in both crops, scouts said.

In Kansas "where the rains missed, row crops were stressed", again causing rating declines for both corn and soybeans.

Gail Martell said that US "corn and soybeans have succumbed to moisture stress in early August needing a soaking rain for improvement".

'Should see this as a bearish'

Nonetheless, with soybean crops improving in states including Ohio and Minnesota, where "warm and dry weather conditions helped advance crop development", the national crop rating remained stable at 71% good or excellent, the best in 20 years, narrowly ahead of the 2004 figure.

Indeed, with crop concerns localised, the data were seen as negative for prices, which indeed declined on Tuesday in Chicago, where November soybeans stood at $10.66 a bushel at 06:40 local time (12:40 UK time), down 1.2%, while December corn eased 0.7% to $3.66 a bushel.  

At Citigroup, Sterling Smith said: "Soybean crop conditions came in as unchanged from last week and the market should see this as a bearish."

At RJ O'Brien, Richard Feltes said that "ratings updates, taken collectively, are bearish as corn did not decline as much as some had feared, while soybeans held steady".

It appeared that "cool temperatures played a major role in offsetting dry July" weather.

'Simply needs more heat'

Cotton futures for December, however, nudged 0.3% higher to 64.45 cents a pound in New York, helped by a decline in the condition of the US crop, by 1 point to 53% good or excellent, a typical rating for this time of year.

Although the crop in Oklahoma improved markedly, as "rain events over the past few weeks helped row crop development," that in Texas, the top cotton producing state, declined 1 point to 38% good or excellent.

"Cooler temperatures slowed [cotton] development in the Northern High Plains," USDA scouts in Texas said.

In Tennessee, the cool conditions also hampered a crop which thrives on drier and warmer conditions than corn or soybeans, with one scout noting that cotton "simply needs more heat units for normal growth".

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