Farm officials underlined the threat to US crops from this week's heatwave, warning of declining soil moisture levels and falling crop condition, which some investors believe may have been worse than thought in corn.
The US Department of Agriculture estimated at 58% the proportion of US soybeans rated in "good" or "excellent" condition as of Sunday, down four points week on week, and a decline worse than investors had expected.
For corn, the proportion seen good or excellent fell by two points to 59%, a decline in line with market forecasts, although some investors have questioned the national figure given the break-down of state-by-state data.
Corn condition conundrum
Bigger drops than two points in good or excellent categories were reported for seven states including Iowa, the biggest producing state, second-ranked Illinois, fourth-ranked Minnesota, and Indiana, expected to have the fifth-biggest crop.
These states between them have been expected by the USDA to produce some 6.5bn bushels of corn, nearly half the national crop.
% of corn rated good or excellent, selected states, (change on week)
Indiana: 72%, (-4 points)
Nebraska: 66% (+1 point)
Michigan: 62%, (-7 points)
Illinois: 59%, (-5 points)
Minnesota: 56%, (-4 points)
Colorado: 52%, (+5 points)
North Dakota: 47%, (-10 points)
Iowa: 44%, (-4 points)
National average: 59%, (-2 points)
Among smaller producing states, the North Dakota crop was downgraded by 10 points.
Conversely, only Nebraska among the top-five producing states reported a condition change better than average, with the good or excellent rating rising by 1 point.
"It is difficult to see how the state figures marry up with the national one," a UK grain investor told Agrimoney.com.
"I am surprised we did not get a lower national rating. That may be a rounding factor which will correct next week."
Reports from USDA crop scouts highlighted the challenge facing crops from a dry late-August period, even before temperatures this week expected to top 38 degrees Celsius in much of the western Corn Belt, including Iowa.
In Iowa last week, "higher-than-average temperatures coupled with the lack of significant precipitation heightened concerns over soil moisture and crop conditions", USDA scouts said.
The proportion of Iowa topsoil rated short of very short of moisture rose by seven points to 72% over the week.
In Illinois, "the dry conditions across the state continue to have a negative impact on the crop conditions," the scouts said, flagging a rise to 69%, from 61%, in topsoil rated short or very short of moisture.
The comments tally with findings last week from the Pro Farmer crop tour which said that "one of the shockers" had been "how dry Illinois soils are", with moisture levels "down from 2012".
'Signs of stress'
Elsewhere, the USDA scouts said that in Indiana, where "topsoil moisture depleted rapidly" last week, "irrigation systems were running full force to try to keep up with the lack of rainfall.
"Some corn fields on light, well-drained soils are showing signs of stress because of the dry conditions."
In Michigan "the extended hot, dry weather has begun to reduce crop yield potentials," while in North Dakota, "continued dry weather has put stress on the row crops".
'Particularly prone to damage'
The dry weather is being seen as especially threatening to soybeans, given that the crop is amid the vulnerable pod-setting and pod-filling phase.
"At their current development stage, soybeans are particularly prone to damage due to insufficient moisture," Commerzbank said.
The overnight USDA data have "exacerbated… fears that the overly warm and dry weather in the US Midwest could significantly reduce yields", the bank said.
Indeed, "trade is discussing the possibility of a 40-bushels-per-acre soy yield, which suggests a 200m-bushels-lower 2013 US soy crop than the USDA's August forecast and the need for drastic rationing of 2013-14 US soy supply," Richard Feltes at RJ O'Brien said.
That is "a daunting task, given record US new crop soybean sales of 19m tonnes plus", he said.
The USDA currently has a US soybean yield figure of 42.6 bushels per acre.