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.

Illinois, Indiana Corn Continues to Burn

While the Midwest in general is getting hammered by the drought, which continues to devastate the corn crop, Illinois and Indiana are getting hit the worst of all the corn-producing states, with no relief in sight at this time as far as rain coming any time soon.

A little over 1 percent of the crop rating drops daily for every day it doesn't rain in the region.

The USDA gave a dismal report today where it dropped its corn yield estimates by 20 bushels an acre, down to 146 bushels. That was a much larger downward revisement than anticipated, causing the price of corn to jump over 3 percent in morning trading.

As for the corn supply, the USDA lowered its projections by 698 bushels over June's estimates, falling to 1.2 billion bushels at the end of 2012.

That shows how devastatingly quick the numbers are falling, and each day causes some damage to the corn crop in a way rain won't help it recover.

Top Corn States' Corn Condition Getting Worse

The most recent U.S. Department of Agriculture report says that the top 18 corn producing states in the nation had the quality of the corn drop, as the drought continues to hammer the Midwest.

According to the USDA report, 30 percent of the corn crop in the top corn states is now considered to be in poor or very poor condition. That's an 8 percent drop since just a week ago, when it stood at 22 percent.

Expert have said there is only about a ten day to two week period left where significant rains must come in order to salvage the corn. Already in some areas it's too late for the crop, even if it was to rain hard.

The states being hardest hit at this time are Illinois and Indiana, with Indiana having 61 percent of its crop rated poor or very poor. Last week 50 percent of Indiana corn had the same rating.

Illinois, which is second only to Iowa in corn production, dropped from 33 percent last week to 48 percent this week as to the percentage of the corn crop being rated poor or very poor.

For the entire nation, the amount of corn rated good to excellent fell from 40 percent this week, down from 48 percent last week.

It appears for every day the drought continues, a little more than 1 percent is added to the poor or very poor rating and subtracted from the good to excellent rating.

While the amount of corn planted this year has given some leeway to the industry, a couple of more weeks of this weather will cut deeply into the earlier corn yield projections, which have already fallen quite a bit for the year.

Corn Prices Jump on Weather Forecast

The price of corn continues to soar as the latest weather forecast offers little hope of rain any time soon for the important Midwest area, especially in Iowa and Illinois, which together account for about 30 percent of the corn yield in the United States.

Since the middle of June corn prices have jumped 30 percent, and could soar much higher as rains aren't expected for over a week in the eastern portion of the Midwest states, with extended forecasts projecting the middle of next week as the earliest time for rain to come to the region.

The rain that is forecast for the nation is mostly for the southern states, offering no relief for the corn states.

Consequently, on the Chicago Board of Trade (CBOT) prices for new-crop corn climbed another 3 percent to a contract high.

In Asian trade front-month corn jumped to as high as $7.59-3/4 a bushel.

Illinois Corn Barely Holding On

Some factors in planting corn in Illinois in 2012 have helped the crop to endure the weather better than the last severe drought in 1988 devastated the corn crop across the Midwest.

It's centered around the fact Illinois farmers got their seed in the ground earlier this year, helping the roots spread out before the drought hit, helping to extract ground water to the plant.

Even though, overall, Illinois corn is in good shape (with the exception of the southern part of the state), concerns are rising as to how long the corn can get water from the ground, as it needs to be replenished soon for the corn to give a decent yield this year.

Approximately 66 percent of the corn crop is under extreme stress at this time, with much of the bottom third of the state under the most stress, which some experts say is close to being beyond the point of being able to come back, even if rains to come.

Another area where corn is under heavy stress is in areas with sandy soils, as those soils don't hold water well, and are the first to stress when rains diminish. The worst area in Illinois in that regard at this time is the Mahomet region.

Farmers with better soils continue to have a good corn crop in the state, but the available moisture is rapidly depleting, and the corn will come under more severe stress if rains to come soon.

In June, where corn needs to get about 8 inches of water for the month, it didn't get near that levels, and the corn needed about 6 or 7 inches of water to come from the soil during that period of time.

Because soil moisture is close to being depleted, Illinois farmers can't rely on that in July. Every day there is no rain is a cut into the yields for the season.

Most corn is not in the critical pollination state, and while 3-digit hot weather can have some impact on the yield, if there is adequate water it can overcome most of that. But the combination of hot weather and lack of weather will devastate a crop, as will lack of water in and of itself.

Experts around country say the next couple of weeks are crucial for the 2012 corn crop, and if significant rain doesn't come, the results will be catastrophic.

Iowa Corn Crop Weakening

With corn it doesn't take long for the health of the crop to change drastically, as the Iowa corn crop, after looking robust just about a weak ago, has started to falter as the ongoing drought starts to effect the crop much more than it had prior to this week.

Not too long ago the Iowa corn crop for 2012 was rated approximately 15 below 2011, but were considered in far better shape than the states surrounding it, according to a report from the USDA.

The USDA gave Iowa a 68 percent good-to-excellent rating. Illinois, the No. 2 producer behind Iowa, fell to 37 percent good to excellent. For other states, their good-to-excellent ratings were this: Indiana, 27 percent; Missouri, 34 percent; and Ohio, 49 percent.

While the other states will continue to falter, along with Iowa, the largest producer of corn and soybeans in the nation will be sure to have its good-to-excellent rating downwardly adjusted from its most recent levels when the next report from the USDA is released on Monday.

The areas of Iowa that are worsening are the upper northwest region of the state, as well as the eastern area.

Top Corn, Soybean Producing Counties in Illinois

According to data released by the U.S. Department of Agriculture, the top corn and soybean producing counties in America are located in Illinois.

Iowa of course remains the top corn and soybean producing state in the United States.

As for corn production, La Salle County was the leading producer, with 60.166 million bushels harvested in 2011. For soybeans, McLean County, in Illinois was the top producer with 14.374 million bushels harvested.

The two counties are the largest in Illinois, helping to boost corn and soybean production, but cooperative weather in the area for 2011 was also a big factor in the good harvest.

Other Illinois counties outperformed the two larger counties on average, with Woodford County have an average yield of 186.5 bushels of corn an acre against La Salle County’s 177.3 bushels an acre., and Knox County produced 61.2 bushels of soybeans an acre against McLean’s 55.4 bushel average.

Illinois Corn Production Led by McLean County

Combined with Iowa, Illinois accounts for about a third of all corn produced in America, and in illinois, McLean country was the top producer for 2010.

Farmers in the central Illinois county produced a total of 60.5 million bushels of corn last year.

According to National Agricultural Statistics Services, the production came form 357,000 acres, with average production coming in at $169.5 bushels an acre.

Behind McLean county in Illinois was LaSalle Country, which produced 54.3 million bushels on 333,000 acres.

McLean also led Illinois in soybean production, reaching 15.8 million bushels from 270,000 acres.