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Market Commentary

Afternoon Comments 05/17


The equity and U.S. dollar markets proved quite strong again Friday, but commodity traders seemed to pay more attention to the negative demand aspects of the greenback rally than to the economic strength implied by stock gains. As for corn, persistent old crop tightness continued supporting nearby futures, while optimism about plantings this week weighed upon deferreds. July corn surged 11.25 cents to $6.5275/bushel in Friday trading, while December dipped 4.5 cents to $5.195.
Market Info

Under pressure: Drought weighs on crop conditions

Angela Bowman, Staff Writer  |   June 11, 2012
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Drought has returned for the majority of the nation’s agricultural states, and the latest Crop Progress report from the USDA showed the impact the extreme dryness is having on crops. The same below-normal moisture and above-normal temperatures that gave farmers one of the fastest corn planting years since the 1980s is also raising questions on what a drought this summer could do to corn yields, stocks and prices.

Overall crop conditions dip

With 66 percent of the nation’s corn crop is in “good” to “excellent” condition, 2012’s growing season is starting out slightly below last year’s report:

 

Very Poor

Poor

Fair

Good

Excellent

This week

2

6

26

54

12

Last year

2

4

25

56

13

While the 2011’s drought severely impacted crops in Texas and North Carolina, this year’s drought is making itself at home in the middle of the Corn Belt. Missouri reported the worst conditions of the country, with 18 percent of corn in “poor” to “very poor” condition. Indiana is close behind at 15 percent.

Other states are feeling the start of what could be another long battle with Mother Nature:

 

Very Poor

Poor

Fair

Good

Excellent

Illinois

2

8

34

47

9

Kansas

2

8

41

45

4

Kentucky

3

8

30

44

15

Tennessee

3

9

26

52

10

Texas reported 8 percent of corn in "poor" to "very poor" condition, making it on-par with the national average and well above their report from 2011, which showed 40 percent of the state's corn in these conditions.

The latest Drought Monitor report shows just how far the drought has carried to the north, and how much of an impact it could have on the developing crops. Read more.

 

Soybeans

Farmers can scratch planting off their lists as soybean planting is wrapping up. North Carolina is the only state with a significant amount (38 percent) of soybeans left to be planted. Ninety percent of soybeans have now emerged.

Soybean conditions are also impacted by the drought:

 

Very Poor

Poor

Fair

Good

Excellent

This week

2

8

30

51

9

Last week

1

5

29

55

10

Last year

1

4

28

57

10

See how your state is doing here.


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