Corn, Soy Outlook Continues to Weaken

The prospects for corn, and increasingly, soybeans, continue to deteriorate, according to the U.S. Department of Agriculture, which said in its latest report that corn in good-to-excellent condition as of Sunday stood at 24 percent and soybeans in the same condition were at 29 percent; both of them dropping 2 percent from last week.

This is the worst ratings of both crops since the devastating drought of 1988.

Even though there was some improvement is several states in the Midwest, the largest corn and soy producing states - Iowa, Illinois, Nebraska and Minnesota had their ratings drop from a range of 2-5 percentage points for corn and 3 to 4 percentage points for soybeans.

Corn has been hit so hard that it is rated 41 percentage point under the five-year average. At this time it's only 5 percentage points above the good-to-excellent rating it had during the same week in 1988.

The soybean rating was 34 percentage points under the five-year average and 10 percentage points over the same week in 1988.

There is little hope of relief in the next 10 days or so either, as less than an inch of rain in predicted throughout the period.

While the stress on the two crops have been slightly eased lately, they will continue to be under pressure going forward, according to agricultural meteorologists.

No soaking rains are expected, and the belief is both crops will continue to falter.

Little Rain for Iowa, Illinois, Nebraska, Kansas and Missouri

While some states will benefit from some cooler weather and rain, major corn and soybean producers Iowa and Illinois will get little relief from drought conditions, and neither will Nebraska, Kansas and Missouri.

Missouri's corn crop is already almost a total loss, and Indiana's isn't much better. Whether rains come in those two states in regard to corn won't have any positive impact on the yields.

Rains are predicted to move into the overall Midwest next week, but projections are only for up to one half inch at most for most areas.

The majority of Iowa, Nebraska, Illinois, Kansas and Missouri will probably only get at most a tenth of an inch or rain, while the states of Michigan, Minnesota, Wisconsin, northern Illinois and Ohio will get from .5 to an inch of rain. Combined it generates the .5 inches of rain mentioned earlier for the Midwest.

Some parts of Iowa and northern Missouri could also get on average about .5 inches of rain over the weekend. As usual, rain will be scattered and unpredictable as to how much it will help drought-stricken regions. But overall it doesn't look good.

In other words, the states with the majority of the corn will continue to suffer drought conditions, putting even more downward pressure on corn yields.

The conservative reports from the U.S. Department of Agriculture should come in with another drop in projected corn yields on Monday, and possibly more for soybeans; although some have benefited from the recent rains in the Midwest.

Most grain experts have about 20 bushels per acre less in yields projections for corn than the USDA has at this time. That should come closer to one another on Monday, depending upon whether private analysts even further downgrade expected corn yields.

In the middle of next week the Commodity Weather Group (CWG) says temperatures in the mid 90s to 100s will probably return Wednesday and into Thursday at least.

According to the CWG, other crops starting to feel the impact of the drought, besides soybeans, are rice and cotton.

Minnesota Corn Tops in Country So Far

While Minnesota farmers are celebrating the fact that corn in the state is in the top condition in comparison to all other states, the weather turned hot last week, and has now put pressure on the corn, whereby there is a need in the next couple of weeks for significant rain to come in order to alter the changing circumstances.

Concerns are how long the subsoil moisture can continue to carry the corn crop, as it continues to draw on the diminishing water.

Corn is now entering the pollination stage in Minnesota, and more rain is critical to the yield of the crop. The quality of pollination is what determines the yield for corn, and if the rains don't come, it'll push down the amount of the corn yield exponentially.

Before the hot weather came, along with the lack of rain, the rating of Minnesota corn, according to Monday’s U.S. Department of Agriculture national crop condition report on July 2, was 82 percent of the corn was in good or excellent condition. That will quickly change if relief doesn't come soon.

Like other states, some parts of Minnesota received some good rain and the crop in those parts of the state are flourishing. Other parts of the state completely missed the rain, resulting in the deteriorating situation.

Minnesota Corn Crop Healthy, Ahead of Schedule

While many of the nation's corn states are struggling because of the ongoing drought, northern states like Minnesota are doing very well, with the corn reportedly growing far ahead of the normal schedule for the state.

At this time in the state the corn height is usually about 12 inches tall at best. But on average it's about 23 inches tall at this time, and will be much more by the Fourth of July, where it's usually not even at the 23 inches it now stands. With a couple of weeks left till July 4, it could reach 30 inches, or maybe even a little higher.

Most of this is based upon Minnesota farmers planting their corn seed earlier than in the past, which accounts largely for the increased growth. The weather has cooperated well too, helping to boost growth.

What's even more important is farmers in Minnesota have planted the largest amount of corn in the history of the state, and so the harvest should be bountiful.

At this time it's too early to know whether that's good or bad news, as the drought in other areas of the country are positive for the price of corn, but the weak global economy, along with strong yields in parts of Brazil could end up with a supply glut, which would over the year put downward pressure on the price of corn.

Interestingly, approximately 17 percent of corn farmers in Minnesota are now concerned about there being too much water, as the region has been drenched lately, according to the USDA. Others say the moisture is exactly what they need.

At this time the USDA says that about 82 percent of the corn crop in the state is in good or excellent shape.

Prime Iowa, Minnesota Corn Country Faces Drought

Prime corn-growing regions of Iowa and Minnesota are facing challenges similar to the last major drought in the region in 1988, causing some growing concern in a year starting with tight corn supply.

Some of the more productive parts of northwest Iowa and southern Minnesota are under pressure, and there's little relief seen to be coming at this time.

While the weather this year is in fact very similar to 1988, the one difference is it is happening earlier than that disastrous year, and so has more time to rebound if wetter weather arrives.

Of course if that doesn't happen, there will be some production and supply problems emerging from the area. If it continues, expectations are parts of eastern Nebraska could be affected as well, and it could spread from there; although that is more the worst case scenario.

In 1988, on average, the drought resulted in about 25 percent less yields for corn.

One major change in corn farming since than has been more drought-resistant corn seed, which should help alleviate some of the effects of dry weather.

That would make it better than 1988, but it would still have a major impact if the weather patterns don't change.

You can see on the map how conditons look at this time.