Corn and soybean prices shot up over 30 cents a bushel on Monday in response to disappointing weekend rain totals and near triple digit temperatures in the forecast for this week. While some parts of Indiana received much needed rain over the weekend, most counties were missed. Crop condition ratings, released Monday afternoon, showed continued crop deterioration in Indiana and in most major corn and soybean producing states. According to the USDA, 92% of Indiana corn was rated as fair to very poor, with only 8% rated good to excellent, down from 12% last week. Nationally, 69% of the corn was rated as fair to very poor, with only 31% good to excellent, down from 40% a week ago. On Tuesday, traders will focus on crop conditions in the western corn belt for evidence the drought is spreading. The USDA reported that Iowa corn was rated 36% good/excellent and Nebraska corn was pegged at only 43% good/excellent. Jim Riley, with Riley Trading, told HAT that crop determination in these states will likely push corn prices near the $8 mark. He said most analysts are penciling in national corn yields in the mid to upper 130 bpa. University of Illinois ag economist Daryl Good said soybean yields will also be reduced by the dry conditions and estimates national yields will come in around 40bpa. He said this will could push soybeans close to the $20 a bushel level because of strong world demand and very tight carryover numbers.
In the field observations confirm what the government ratings show: Indiana crop conditions are getting worse. DuPont Pioneer agronomist Justin Welch says there are a few spots in Central Indiana that are looking good, but very few, “There is an area just south of Kokomo that caught a few showers and, in this area, the corn looks pretty good.” But, he added one does not have to travel very far north or east to find very dismal crop conditions. Welch says, even with scattered rains in the next few days, the yield damage in corn cannot be reversed, “Even if a plant has managed to pollinate and put on ears, I am not sure these crops have enough to finish.” He worries that, if corn plants manage to make it to harvest, the stalks will be so weak that the plants may not be able to stand long enough to be harvested. About the only advice Welch has for his growers is to check your fields, “I know it is a hard thing to do, but we need to assess the damage and figure out how bad yields are going to be.”
On the soybean side of things, Welch says the jury is still out, “I think we have a couple more weeks on the soybeans. They can respond if we get some August rains.” He told HAT most soybeans will set pods but if there will be enough moisture to fill those pods remains to be seen. Good says an exception to this may be some double crop fields that were planted late and will likely be abandoned rather than harvested. He said a smaller US crop combined with a small South American crop will make for a very small world supply that will be rationed at very high prices.