USDA: Harvest speeds ahead
While the U.S. corn crop is being harvested faster than the average pace, overall ratings are not improving, according to the USDA's Weekly Crop Progress Report. As a result, the market has decided to focus on other major factors.
On Tuesday, the USDA indicated the U.S. corn good/excellent rating is unchanged from a week ago, while the same soybean rating dropped 1% in that same time period.
For corn, the USDA rates the crop as 22% good/excellent, 26% fair, and 52% very poor-poor. The crop is 10% harvested, ahead of a 3% year ago pace and a 3% five-year average. The USDA measured the U.S. corn crop as 86% dented, sharply ahead of just 65% dented a year ago. Also, 41% of the corn is in the mature stage, compared to 15% a year ago.
Meanwhile, the U.S. Spring wheat crop is seen as 95% harvested, up from 63% a year ago.
In its report, the USDA rated the soybean crop as 30% good/excellent, 1% below a week ago. Also, 33% of the crop is considered in fair condition and 37% very poor-poor. Perhaps the more noticeable rating is a 19% drop in soybean leaves vs. 5% a year ago.
Because the corn harvest is speeding forward and the soybean leaves are dropping at a faster rate, this decreases the threat of an early frost, says Don Roose, U.S. Commodities.
"The condition side of the weekly reports is losing its importance. Harvest progress is bubbling to the top of the market's psychology, along with South America's planting weather," Roose says.
With U.S. harvest progress, the market gets to digest real corn yields, test weights, and harvested acreage numbers, Roose says.
Right now, the market is dealing with a structural problem, he says. "For instance, with upfront contract months trading at huge premiums to back-months, the market is screaming and telling the U.S. farmer to sell off of the combine," Roose says.