Downtrends firmly established
Downtrends in grains are now more firmly established, with corn, wheat, and soybeans all running to new recent lows the past week that have clearly turned trends back to down in all grains. The negative technical development comes on the heels of a bearish fundamental development, with very high crop ratings and normal to ahead of normal planting progress in almost all US crops. That's a formula for lower prices for now.
Crop conditions remain high for all grains, with corn remaining at 76% G/E which is still a very high rating, and well above last year''s 69%. Soybeans first rating of the year came in at 75% G/E, also a very high rating while 84% of the crop is planted, equal to the 5 year average. Cotton crop condition improved to 66% G/E, up from last weeks 63%. Rice crop condition also improved another 2% to 76% G/E, well above last year''s 55%. Winter wheat crop condition improved 1% to 66% G/E, well above last year''s 44%.
Oat crop condition improved to 82% G/E, up 4% from last week and well above last year''s 55%. HRS wheat remained high at 84% G/E, down 1% from last week but well above last year''s 73%. Barley is rated 86% G/E, up 2% from last week and well above last year''s 74%. Pasture is rated 71% G/E, up 2% from last week and well above last year''s 59%. Overall, we have a very highly rated crop so far this year, with planting progress and crop development equal to or ahead of average for most crops. The exception is winter wheat heading at 84%, just lightly below the 5 year average of 86%. Only 3% of the winter wheat is harvested, with 17% in TX and 12% in OK. This is a recipe for a good yielding crop in 2010, and is applying some pressure to grains so far this spring.
Continued high crop conditions and ratings for crops continues to apply pressure to grains as they continue to imply above average yields for crops. The Pro Ag yield models expanded in all grains, forcing us to apply even higher yields to current year supply/demand tables. The corn yield model expanded another half bushel per acres this week to 162.58 bu/acre, well above Pro Ag''s ''trend'' yield of 159.5 bu (USDA is at 163.5 bu).
Winter wheat yields expanded the most this week, hiking a huge .52 bu/acre this week to now be nearly 50 bu/acre, well above 'trend' yields of 46 bu and well above USDA''s current projection. The first Pro Ag soybean yield estimate of the year came in at 43.2 bu/acre, above 'trend' of 43 bu and also above USDA's estimate of 42.9 bu/acre. Nearly all crops are highly rated, and indicate an above average yield in 2010 is likely.
Weatherwise there are very little threats to the 2010 crop so far, with rain continuing to keep soil moisture levels high and with lots of cushion against any drought threats. The coming week includes a cool/wet week for most of the corn belt and northern plains, and will keep soil moisture levels high but will also make completing planting more difficult.
Overall, there still remains no sign of any significant crop problem and also no sign of the dreaded high pressure dome which has been warned of by some weathermen. In fact, we will need some drying weather in the coming weeks to complete the planting of the 2010 crop.