Crops Improve Despite Isolated Flooding
The corn and soybean crop continued to improve this past week, despite the crop damage from excess rainfall/flooding in Iowa, Nebraska, Minnesota, and Wisconsin last week. Yes, I did say the crop improved last week, you Iowa, Nebraska, Minnesota, and Wisconsin producers!
That's because the improvements in other states more than offset the declines in your states such that nationally the crop did improve in yield potential slightly last week. What is scary for bears is that with sunshine and time, even the crop conditions in Iowa, Nebraska, Minnesota, and Wisconsin can improve significantly in the weeks and months ahead. That's why the old adage 'rain makes grain' is so powerful, and why we were reluctant to get bullish in the isolated flooding that was taking place last week.
As for last week, the crop conditions released yesterday indicated a 2% decline in crop condition ratings to 74% G/E in corn, but the yield model suggested a .24 bu/acre yield increase to 163.9 bu/acre, well above trend of 159 bu/acre and indicating 'rain makes grain' is a true adage in spite of damage to Iowa, Nebraska, Minnesota, and Wisconsin last week.
Soybean crop conditions also declined just 1% to 72% G/E, but the yield model still increased .12 bu/acre to 44.8 bu/acre, above trend at only 44.02 bu/acre. So we have an above-average corn and soybean crop in the field, and it continues to improve despite the crop damage in isolated areas last week. Headlines (crop damage from weather) do not always mean averages, as the yield potential improved despite the headlines written about crop damage last week in the U.S.
Even winter wheat yield potential improved last week; with crop conditions steady at 30% G/E, the yield model improved .39 bu/acre to 45.74 bu/acre (but we did lose two data years in the model making it less reliable). That is vs. trend yields of 47.7 bu/acre, so we still have a below-average winter wheat crop despite improvement last week. Winter wheat is now 33% harvested vs. 31% on average, so despite some rain delays they are still making good progress. (Last week dried out a bit in HRW wheat territory, too.)
Cotton conditions improved 2% to 53% G/E, so that is also showing improvement from last week. Soybeans are now 95% planted, still ahead of the normal pace of 94% planted at this time, with 90% emerged vs. 87% average at this time. Sorghum conditions also jumped significantly to 57% G/E, up 4% from last week. Sunflowers are 83% planted, still catching up to the average pace this week of 84% planted. Winter wheat is 96% headed, up from 94% average so the crop is developing on time. HRS wheat is 98% emerged vs. 95% normally, with conditions rated 71% G/E, down 1% from last week but still a high rating. HRS wheat is only 10% headed vs. 16% normally at this time, so development is behind normal. Oat conditions were steady last week at 64% G/E. Barley conditions, however, improved 2% to 67% G/E, with 17% headed vs. 13% average as the northwest planted early. Pasture conditions are up 1% to 55% G/E, showing that "rain makes pasture/hay" as well.
Pro Ag remains bearish as the crop improved in yield potential last week, reflecting the adage that 'rain makes grain' once again. Even with a trend yield as measured by USDA, we will have a buildup of stocks to 1.7 billion bushels corn and 325 mb soybeans. Pro Ag suspects the actual planted acreage of soybeans will grow in the June 30 acreage report, and that means even larger soybean carryout. Pro Ag remains bearish grains, especially corn and soybeans, as we enter the critical July 4 time frame for crop development.
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