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45513

Corn Ratings Slip on Isolated Heavy Rain, Flooding -- USDA

Largely because of persisting heavy rainfall and its effects on early crop development, corn conditions slipped in the last week, and that's expected to continue through the next week, analysts say.

The downturn in conditions -- from 76% to 74% good-to-excellent in the last week, according to Monday's USDA-NASS Crop Progress report -- is focused mainly in the northern and northwest Corn Belt where up to a foot of rain has fallen in the last 10 days. Despite these conditions, 70% of Minnesota's and 79% of Iowa's corn crops are in the two highest categories, according to Monday's report.

"The report showed the nation's corn crop rated at 74% good to excellent. This is down 2% from last week and is close to trade estimates," says Kluis Commodities broker and market analyst Al Kluis. "The northern Corn Belt was where conditions dropped. The Minnesota corn crop is rated 80% good to excellent. The best crops are in the central and eastern Corn Belt."

Corn development is not as far along; it's slightly behind pace, though taking general weather conditions over the last few days into account -- and looking ahead to warmer temperatures overall in the next week -- it should catch up soon.

"Corn silking is generally running slightly behind the five-year average in southern areas, but above-normal temperatures across the Midwest last week, along with the heat expected this weekend and next week, should allow corn silking to occur near the five-year average across the Corn Belt as a whole," says MDA Weather Services senior ag meteorologist Kyle Tapley.

The young soybean crop -- 95% of which is planted as of Sunday, Moday's report shows -- is rated slightly lower than a week ago, too, with 72% of that crop in good or excellent shape, down just slightly. That crop's emergence is at 90%, just ahead of the normal pace.

"Nationwide soybean planting was at 95%. This is 1% ahead of the five-year average," Kluis says. "The crop is in good shape, with an initial good to excellent rating of 72%."

Crop ratings this high would typically be generally bearish, but Kluis said prices could just as well move slightly higher. Yet an old market adage will likely stay firmly in place, adds market analyst Ray Grabanski, that will make it tough to get too bullish in the near-term even in spite of conditions like the heavy rains and flooding that's affecting parts of corn and soybean country.

"What is scary for bears is that with sunshine and time, even the crop conditions in Iowa, Minnesota, Nebraska, and Wisconsin can improve significantly in the weeks and months ahead," Grabanski says. "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."

   

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