7th Aug 2012, by Agrimoney
Data highlighting the maturity of US soybeans, limiting their potential for rain-assisted recovery from drought damage, undermined relief at a stabilisation in the crop's condition, after a decline lasting since June.
The US Department of Agriculture rated 29% of domestic soybeans in "good" or "excellent" condition as of Sunday, the same as the week before, ending a run of six successive weeks of deterioration.
The data, which followed a pick-up in Midwest rains, showed that "rainfall over recent weeks could halt the loss in quality in soybeans",Commerzbank said.
"With further rain forecast, the rating could improve even more."
Indeed, while soybean condition fell in states such as Iowa, the top producer, Missouri and Ohio, "some rebound is expected" for readings as of next Sunday, Richard Feltes at broker RJ O'Brien said.
Development factor
However, Mr Feltes urged caution over the degree to which soybeans can yet recover, given the forwardness of the crop, of which the proportion reaching the sensitive pod-filling phase is running well ahead of average
"Soybeans setting pods is an astonishing 71% versus 53% normal—a subtle reminder that recent early August rains will not be benefiting this crop as much as a normal crop," he said.
Bullish investors also took comfort in a rise of two points to 39% in the proportion of the crop rated in "poor" or "very poor" health.
Soybean futures for November rose 1.2% to $16.03 a bushel in Chicago nonetheless as of 04:00 local time (10:00 UK time).
'Ears have been dropping'
The rain itself caused some damage to crops in some states, such as Indiana, where US Department of Agriculture staff highlighted "reports of downed corn after storms moved through the state".
Fallen, or so-called "lodged", crops offer lower yield potential, in part because the area exposed to sun-given energy is less and, at harvest time, because they escape combines.
Furthermore, rain is of limited benefit, given that nearly all US corn has passed the sensitive pollination phase.
In Indiana, where only 7% of corn is in good health and none rated excellent, "ears have been dropping" thanks to drought stress, the USDA staff said.
Even in Nebraska, where the corn crop stabilised at a better-than-average 35% rated good or excellent, "much of the eastern third of the state, where most of the dryland crops are grown, received only limited precipitation with conditions remaining poor for dryland crops and pastures.
"Drought-damaged corn acres continue being chopped for silage or cut for hay to make up for pastures which are providing little or no grazing capacity."
'Biggest hit'
The overall US corn crop was rated 23% good or excellent, down one point on the week, with the proportion rated poor or very poor increasing two points to 50%.
"The poor or very poor rating may have been on the high end of expectations," Jon Michalscheck at Benson Quinn Commodities said, flagging in particular a deterioration in the North Dakota crop,
"South Dakota took the biggest hit as it increased 7 points to 48% poor or very poor, which could have a major impact on this region's corn supply for the upcoming crop year."
Corn for December edged 0.1% higher to $8.05 a bushel in Chicago.
'Cotton was stressed'
A bigger decline was noted in the health of the cotton crop, of which 41% was seen good or excellent, down three points on the week.
The drop was led by a 10-point decline to 24% in the proportion of cotton in Texas, the top producing state, in good or excellent health.
"In both the High and Low Plains, cotton was stressed due to high temperatures and lack of moisture," state USDA staff said.
"Irrigated cotton continued to set bolls, while dry land acres struggled to survive with some fields being ploughed up."
Even on watered land "many producers continued to have trouble meeting irrigation needs with the available water supply".
Data highlighting the maturity of US soybeans, limiting their potential for rain-assisted recovery from drought damage, undermined relief at a stabilisation in the crop's condition, after a decline lasting since June.
The US Department of Agriculture rated 29% of domestic soybeans in "good" or "excellent" condition as of Sunday, the same as the week before, ending a run of six successive weeks of deterioration.
The data, which followed a pick-up in Midwest rains, showed that "rainfall over recent weeks could halt the loss in quality in soybeans",Commerzbank said.
"With further rain forecast, the rating could improve even more."
Indeed, while soybean condition fell in states such as Iowa, the top producer, Missouri and Ohio, "some rebound is expected" for readings as of next Sunday, Richard Feltes at broker RJ O'Brien said.
Development factor
However, Mr Feltes urged caution over the degree to which soybeans can yet recover, given the forwardness of the crop, of which the proportion reaching the sensitive pod-filling phase is running well ahead of average
"Soybeans setting pods is an astonishing 71% versus 53% normal—a subtle reminder that recent early August rains will not be benefiting this crop as much as a normal crop," he said.
Bullish investors also took comfort in a rise of two points to 39% in the proportion of the crop rated in "poor" or "very poor" health.
Soybean futures for November rose 1.2% to $16.03 a bushel in Chicago nonetheless as of 04:00 local time (10:00 UK time).
'Ears have been dropping'
The rain itself caused some damage to crops in some states, such as Indiana, where US Department of Agriculture staff highlighted "reports of downed corn after storms moved through the state".
Fallen, or so-called "lodged", crops offer lower yield potential, in part because the area exposed to sun-given energy is less and, at harvest time, because they escape combines.
Furthermore, rain is of limited benefit, given that nearly all US corn has passed the sensitive pollination phase.
In Indiana, where only 7% of corn is in good health and none rated excellent, "ears have been dropping" thanks to drought stress, the USDA staff said.
Even in Nebraska, where the corn crop stabilised at a better-than-average 35% rated good or excellent, "much of the eastern third of the state, where most of the dryland crops are grown, received only limited precipitation with conditions remaining poor for dryland crops and pastures.
"Drought-damaged corn acres continue being chopped for silage or cut for hay to make up for pastures which are providing little or no grazing capacity."
'Biggest hit'
The overall US corn crop was rated 23% good or excellent, down one point on the week, with the proportion rated poor or very poor increasing two points to 50%.
"The poor or very poor rating may have been on the high end of expectations," Jon Michalscheck at Benson Quinn Commodities said, flagging in particular a deterioration in the North Dakota crop,
"South Dakota took the biggest hit as it increased 7 points to 48% poor or very poor, which could have a major impact on this region's corn supply for the upcoming crop year."
Corn for December edged 0.1% higher to $8.05 a bushel in Chicago.
'Cotton was stressed'
A bigger decline was noted in the health of the cotton crop, of which 41% was seen good or excellent, down three points on the week.
The drop was led by a 10-point decline to 24% in the proportion of cotton in Texas, the top producing state, in good or excellent health.
"In both the High and Low Plains, cotton was stressed due to high temperatures and lack of moisture," state USDA staff said.
"Irrigated cotton continued to set bolls, while dry land acres struggled to survive with some fields being ploughed up."
Even on watered land "many producers continued to have trouble meeting irrigation needs with the available water supply".
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