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Mild temps to help corn pollinate
Monday afternoon's Crop Condition report showed another decline in crop condition ratings, with the corn down 3% from good to move 1% to fair and 2% to poor.
Now corn is rated 63% good/excellent vs. only 26% last year during the disastrous crop production year. The Pro Ag corn yield model, however, was fairly stable at 161.93 bushels per acre, down only 0.46 bushels per acre from last week. Corn is 43% silking vs. 56% normally at this time. So we are still slightly behind the normal development for corn, but catching up to average yet with the heat of summer. Actually, cooler temps than normal are forecast ahead for the next two weeks. That may slow development but will likely result in ideal pollination conditions as well.
Soybean conditions declined 1% in the G/E category to 64% G/E, moving 1% from good down to fair, and leaving the percentage rated poor/very poor at only 8% vs. last year's 35%. Last year the G/E rating was only 31% by this time, so clearly this is not a disastrous crop like last year.
The Pro Ag soybean yield model was stable at 44.50 bushels per acre, down only 0.02 bushel per acre from last week. Soybeans are 46% blooming vs. 59% average, so we are still just a bit behind normal development. Soybeans setting pods are at 8% vs. 19% normally.
HRS wheat conditions were rated 68% G/E, down from 70% last week but still above last year's 60% rating at this time (and last year was a near-record large yield!). HRS wheat is 85% headed, only slightly behind the normal pace of 88% headed, so we are also catching up to average pace here as well. Winter wheat is now 75% harvested, only 1% behind the average pace of 76%. Much ado was made of Ohio being only 28% harvested last week (meaning double-crop soybeans were not getting planted). But this week that harvest pace moved to 93% (65% harvested last week) on warm/dry weather, so the soybeans double crop can still be timely planted. It's likely that most if not all of the double-crop soybeans did get planted timely.
Other crop progress includes sorghum 27% coloring vs. 25% normally, with ratings at 45% G/E (Up 1% this week) vs. only 26% last year at this time.
Cotton is slightly behind normal development, but conditions are 44% G/E, up 2% from last week and compared to 47% last year at this time. Barley heading is 91% vs. 88% normally (actually ahead of average!), and conditions are rated 65% G/E, steady from last week and above last year's 57%.
Overall, we have slightly better-than-average crop coming in 2013 - much different than last year's devastatingly bad crop (especially corn) as we are headed into pollination of corn and bloom stage of soybeans. Soils are only slightly dry in the western Corn Belt, and relatively soggy yet in the eastern Corn Belt, so there is a bit of a cushion to drought yet in the central and eastern Corn Belt. It's not likely that this year's crop will tumble like last year, so this is not likely to repeat last year's devastating drought. The question now is, will the crop decline from here, or will it continue to improve as we move into fall?
The fact still remains that corn yield models are at 162 bushels per acre vs. USDA's current number at only 156.5 bushels per acre. So there is likely to be a hike in yield projections unless the crop starts to decline into August.
However, the forecast is for cool conditions the coming week, which will greatly aid pollination of corn, with the 8- to 14-day forecast warming some but still cooler than normal. The precip is the somewhat concerning forecast, as rainfall amounts the coming week will be wetter than normal across Missouri, Kansas, Colorado, Arkansas, and the Southeast but below normal elsewhere.
The rain will greatly aid dry soils in Colorado, Kansas,Missouri, and Arkansas but will leave deficits in moisture across Iowa, Nebraska, and points in the central Corn Belt.
The 8- to 14-day forecast puts the above-average precip smack dab in the center of Nebraska, Iowa, Illinois, Indiana, Kentucky, Tennessee, and Ohio, which would be bearish. But the forecast can shift in the coming seven days, so the reliability of this forecast will still be questioned.
Overall, Pro Ag sees a crop that is slightly above average but has stopped improving for now. A good rain across the Corn Belt would change all that, but for now, only scattered rainfall is falling in the Corn Belt, and crops are just stable while they wait for their next big drink.
Pro Ag remains bearish, as the crop continues to develop in good conditions overall. Downside price targets remain $4.50 Dec corn, $9.50 to $10 Nov. soybeans, and $6 CBOT wheat.
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