Fundamentally Speaking
Early July Corn & Bean Ratings Above Average
Early July 2015 corn and bean ratings actually above average
While the heavy rains in June have pared both planted and harvested acreage for this year's corn and especially soybean crops, the trade is wondering whether enough damage has been done for USDA to lower the projected row crop yields in this Friday's WASDE report.
Despite widespread trade expectations that crop conditions for corn would continue to slide, they actually improved over the past week with 69% of the national crop as of yesterday rated either in the good or excellent categories, up 1% from last week.
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Using our usual ratings system where we weight the crop based on the percent in each category and assign that category a factor of 2 for very poor, 4 for poor, 6 for fair, 8 for good, and 10 for excellent and then sum the results this week's rating is 746.
Even though this is the second lowest rating as of July 5th since 2008 the accompanying graphic shows this is still above the 1986-2014 average of 742 and it is even higher than the ten year average of 736.
Furthermore this week's figure is very close to the extrapolated 7/5/13 rating of 749 and the 7/5/11 rating of 748, and both years the USDA kept its July corn yield estimate unchanged from its June projection.
We also note talk that the USDA may also lower its 2015 soybean yield projection but there is even less precedent for such action than in corn unless it's a disastrous year like 2012 when it was lowered by 3.4 bpa due to extreme drought conditions.
This week's soybean crop rating, unchanged at 63% in the good or excellent categories, was also a surprise to the trade anticipating a 1-3% combined decline.
Furthermore, while this week's crop rating using our system clocked in at 726, also the second lowest since 2008, it is above the ten and 30 year averages of 722 and 719 respectively.
(KA)
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