Farm officials offered US growers some hope even as they revealed further sharp deterioration in the condition of crops, sapped by a drought confirmed as the worst since 1956.

The proportion of the US soybean crop rated in "good" or "excellent" condition sank by a further six points to 34% in the week to Sunday, US Department of Agriculture data showed, more than the five-point decline that investors had expected.

For corn, the drop was of nine points to 31%, also a bigger fall than forecast, and stoking thoughts that the health of the crop might yet fall below that of 1988, the worst year for growers in recent memory, when the figure dropped to 14%.

"Without a change in the current forecast there could be a chance for that level to be broken this year," Benson Quinn Commodities said.

'Crop conditions deteriorated'

The drops reflected the continued spread of dry conditions west and north from the eastern Corn Belt, which has been the focus of crop concerns.

In Iowa, the top corn and soybean producing state, the proportion of the grain making the top two grades tumbled by 10 points to 36%, and of the oilseed by 10 points to 38%.

"Although Iowa received scattered showers during the week, the bulk of the week was dry and sunny," USDA officials said.

"Both corn and soybean crop conditions deteriorated as high temperatures and below normal precipitation continued to take a toll."

In the eastern Corn Belt itself, the proportion of Indiana corn rated good or excellent fell by a further four points to 8%, and of soybeans by three points to 11%.

'Beneficial response'

However, the data highlighted too the potential for crops yet to recover, especially soybeans, for which 84% have yet to enter the sensitive pod-filling stage.

In corn, for which pollination is the most vulnerable developmental step, 71% has already entered, or finished, silking.

In Kentucky and Tennessee, albeit small producing states, the proportion of soybeans rated in good or excellent condition jumped eight points, to 16% and 34% respectively.

"Conditions were seen improving across the south east after a week of scattered rainfall," Benson Quinn said.

The US cotton crop, for which the region is a more important producing area, was rated 45% good or excellent – a 1 point rise during the week.

"US cotton crop conditions showed a beneficial response to the recent rain," Luke Mathews, at Commonwealth Bank of Australia, said.

'Some renewed optimism'

USDA officials in Tennessee said that, despite "soaking rainfall and lower temperatures… the drought is not broken" in the state.

"The corn condition rating, although improved, continued to point to a season with over half the acreage in a heavy or extreme loss of yield situation."

However, "some renewed optimism now exists for soybeans, cotton and tobacco which are rated in mostly fair or good condition".

'Still hope'

And even in the parched eastern Corn Belt, there was still hope for soybeans, Darrell Holaday at broker Country Futures said following a crop tour.

"I did not see any soybeans that I really feel have lost yield if there was normal weather from this point forward," he said.

"Even where the corn was the worst, it was not uncommon to see very good soybeans with good plant health and generally very good height."

Separately, official US meteorologists late on Monday said that some 56% of continental US was iun some form of drought, the largest percentage since December 1956.

"Indicators suggest that the 2012 drought is similar to the 1950s drought in extent, pattern, and intensity, although not in duration," the NOAA said.