Soybean Crop Improves Slightly While Corn Crop Drops

USDA crop update surprised futures traders by indicating a further slight decline in U.S. corn crop conditions last week while indicating a slight improvement in the condition of the U.S. soybean crop during the week ended Sunday.. Further declines in eastern Corn Belt states offset improvement in the western Corn Belt.

Soybeans

USDA rated the U.S. soybean crop 45% good/excellent, up from 43% a week earlier. That was at the low end of trade expectations for a 2-6 point increase in the good/excellent rating. The poor/very poor rating for the U.S. crop was unchanged at 22%.

Further deterioration in conditions in a number of Midwestern states partially offset crop improvement in the key states of Iowa and Illinois.

Eastern Corn Belt conditions continued to slip. The Ohio crop deteriorated sharply again with USDA's

poor/very poor rating rising 9 percentage points to 44%, while the good/excellent rating fell to only 19%.

The portion of the Indiana crop rated good/excellent fell 4 points to 35%, while the portion rated poor to very poor rose 3 points to 27%.

In the western part of the growing belt, conditions continued to decline in Missouri, Nebraska and Kansas.

The Iowa crop improved the most on the week, going from 60% good/excellent to 67%. The portion of the crop rated poor/very poor fell to 11%.

The Illinois crop improved to 40% good/excellent, from 35% a week earlier. That crop was rated 20% poor/very poor, down from 22%.

Corn

Monday afternoon's USDA crop update surprised futures traders by indicating a further slight decline in U.S. corn crop conditions last week. Further declines in eastern Corn Belt states offset improvement in the western Corn Belt.

USDA rated the U.S. corn crop 42% good/excellent as of Sunday, which was unchanged from a week earlier. The portion of the crop rated poor/very poor was up 2 percentage points to 27%. The trade had expected a 2-6 point jump in the good/excellent rating.

The USDA ratings showed a significant decline in conditions in the eastern Corn Belt, with the good/excellent rating for the Indiana crop falling 5 points to 31% while the poor/very poor rating rose 5 points to 32%.

The Ohio crop continued to deteriorate and is now in the worst condition of any of the significant producing states. Ohio corn was rated 52% poor/very poor and only 16% good/excellent.

The weekly crop update indicated only a slight improvement in the key Illinois crop despite some good rains across much of central Illinois last week. The Illinois crop is now rated 37% good/excellent and 25% poor/very poor.

The most significant improvement in corn conditions came in Iowa, where the crop was rated 65% good/excellent, up from 59% a week earlier. The poor/very poor rating for Iowa corn fell 3 points to 12%.

USDA also reported a slight improvement in the hard-hit Nebraska and South Dakota crops.

Editors note: Richard Brock, Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

To see more market perspectives, visit Brock's Web site at www.brockreport.com.