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Corn takes dive in crop progress report

John Walter 06/25/2012 @ 3:37pm

The  U.S. corn crop took a significant turn for the worse during the week ending June 24, according to USDA in its weekly Crop Progress report.

The report came on a day when corn futures contracts finished limit up, as traders continue to worry about weather impacts on the crop. December CBOT corn closed up 40 cents, 7.2%, at $5.94 a bushel, the contract's highest settlement since November.

While the amount of corn rated excellent in the 18 states surveyed held at 11% compared with the previous week, the good category dropped by seven points, from 52% to 45%, USDA reported. Corn rated in the poor-very poor category rose to 14% versus 9% last week.

At the state level, Indiana corn now is seen 36% poor-very poor. Only 27% of the state’s crop is rated good-excellent. USDA rated the Illinois corn crop as 22% poor-very poor, with 37% of the crop good-excellent. Another struggling Corn Belt state is Missouri, where 14% of the crop is rated poor-very poor, and 34% good-excellent.

The ratings likely will underline the bullish outlook for corn, traders say. The trade had expected crop ratings to drop “at least” two to three percent, sources told Agriculture.com.

With the limit-up finish Monday afternoon, the fresh numbers from USDA “will add fuel to the fire,” said Scott Shellady, commodity options trader and Agriculture.com commentator. “The numbers show that today’s move was warranted,” he added.

“Things are bad. If we don’t get needed rains in the next three weeks, it’s definitely going to get worse, and we won’t be able to keep up with demand,” Shellady said.

Soybean condition kept somewhat more of an even keel. USDA rated 53% of the crop good-excellent, still a three point decline from last week.

Marketing adviser Al Kluis sees more drama ahead. "This report--and with very hot temperatures forecast for the dry areas again this week--odds are good crop conditions and yield potential will take a hit again next week. This is the critical pollination time period for corn. For many areas the damage is irreversible."

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