Analysts have been anticipating a drop in crop quality ratings and finally saw it last week. Crop ratings deteriorated even more than they had anticipated. U.S. crops are showing signs of decline and crop weather is more important now than ever.
“Crop ratings deteriorated even more than we anticipated this week after dry conditions hit parts of the Midwest and Plains,” notes Farm Futures senior grain market analyst Bryce Knorr.
USDA dropped corn quality ratings from 72% to 71% good-to-excellent. However, quality is still better than the 60% good-to-excellent rating last year.
Nebraska is leading the way in terms of ratings. 85% of the state’s crops rated good-to-excellent. Nebraska isn’t the only state seeing exceptional ratings. North Dakota is at 85%, Illinois and Wisconsin are at 81% and Minnesota is at 77%.
However, in the grand scheme of things, yield potential still fell significantly from the prior week.
“Potential corn yield based on the ratings fell 1.3 bushels per acre nationwide, with steady to lower conditions seen west of the Mississippi River,” Knorr said. “Our models put yields at 178.7 bpa to 179.4 bpa, though that’s still better than we found in our survey of growers. Farmers surveyed expect yields of 175.4 bpa.”
Physiologically though, corn has progressed more quickly than average. Last week, 96% of the corn crop was silking. Additionally, 57% is at dough stage. 12% is now dented as well.
Soybean Quality Losing Ground
Soybean crop condition spiraled down even faster than corn. According to the USDA, 67% rated good-to-excellent as of Aug. 5. When you look from state to state, many are in good shape. However, areas like Missouri, Kansas, and North Carolina are struggling.
“Soybean yield potential was steady to lower in states outside the Delta or not adjacent to Lake Michigan,” Knorr says. “Overall yields were one-half to a full bushel per acre lower depending on the model followed, pointing to yields between 50 bpa to 51.1 bpa. The low end of that range is in line with our survey, which puts the nationwide yield at 49.8 bpa.”
Soybean crop progress is still outpacing recent years.
Last week, 92% of the crop was blooming, up from 89% in 2017 and a five-year average of 86%. And 75% of the crop is setting pods – significantly higher than 2017’s pace of 63% and a five-year average of 58%.
Weather Plays Key Factor
Due to the bitter cold of March and April, crops got a late start in planting this year. However, the tables turned in May when we saw temperatures well above normal and little to no rain for the first three weeks. This allowed basically the entire U.S. crop to be planted in a little over three weeks.
Even after the late start, rapid germination and early growth allowed crops to really take off. In fact, crops caught up, and even passed, the normal stage of progress. We now have an early developing crop.
The early summer was nearly ideal, with adequate rainfall and warmer-than-normal temps allowing rapid growth. But now, we are starting to see some stress in official numbers, and the forecasts are also starting to hint at a few problems.
With so many soybeans setting pods, weather is become more and more of a factor in yield potential. If moisture and sunshine are available in August, it is amazing what plants can do.
Overall we had a great start to the 2018 crop, but variable weather and a lack of rainfall in some areas in later stages of July and into August are finally starting to stress this crop after using up some of the stored soil moisture
The crop still looks to be an above-average corn and soybean crop. However, weather will determine how good the outcome is. It could either be taken backwards to near average yields or pushed forward to another record yield. It all depends on temperature and rainfall.
How will the crop progress decline impact the soybean market?
Image courtesy of farmfutures.com