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Corn, Soybean Crops Hit the Gas Pedal -- USDA

The 2014 corn crop is out of the blocks in great shape, according to Monday's USDA-NASS Crop Progress report.

This week's report marks the first of the year showing the overall condition of the crop, 95% of which is planted, according to Monday's report. Thus far, 76% is in good or excellent condition, 9% above where it was a year ago. None of the crop was rated "very poor," with poor or fair condition taking account for the remaining 24%.

"Emergence jumped 20 percentage points to 80%, which is right at the five-year average," says market analyst and broker Al Kluis with Kluis Commodities. "The first USDA report of conditions showed the nation’s corn crop rated at 76% good to excellent, one of the highest ratings ever."

That 80% figure for emergence is right in line with the previous 5-year average, USDA shows, after making a 20% jump over the previous week. Planting -- for all intents and purposes finished -- is now 1% ahead of the normal pace.

Soybean planting, on the other hand, is now 8% ahead of the normal pace at 78%. That's a 19% jump over the previous week and almost 25% ahead of this week a year ago. Emergence doubled in the last week, from 25% to 50%, now 5% ahead of the average pace and a whopping 21% ahead of this time last year.

Turning to wheat conditions, the amount of the crop in good or excellent condition was unchanged over the last week at 30%. Forty-four percent of the crop is in very poor or poor shape, with the remaining 51% in fair or good condition, according to USDA. At this point in the year, however, these numbers may not matter much, especially this being such a drought-shortened year for that crop.

"The grain trade’s attention will now being to focus more on actual yield reports," Kluis adds.

The planting progress and early development pace for the corn and soybean crops, though welcome occurrences for the farmers tending them, could exert major bearish pressure on those pits on the CME Group floor, analysts say. Progressive Ag and market analyst Ray Grabanski says that could amount to as much as a $1/bushel hit to corn and $2/bushel to soybeans.

"Pro Ag projects we have an above average corn and soybean crop coming in fields, and even with trend yields we will have a projected 1.7-billion-bushel corn carryout and 330-million-bushel soybean carryout," Grabanski says. "Based on this fact, Pro Ag projects corn to drop $1 or more from recent highs (already we've dropped 60 cents), and soybeans to drop $2 or more by harvest. That's why we are 100% priced in 2014 and 2013 corn/soybeans."

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