Crop Conditions and Falling Prices - Tuesday, 08 July 2014

This last week my family and I drove from Florida to Iowa, crop surveying the entire way.  After seeing a large portion of the countries crop it’s really no shock to us that the crop condition report shows the numbers it does, every state we went through has beautiful crops with few areas showing any crop loss or damage.  The weekly crop conditions report yesterday remained unchanged from the week prior with only 5% of the nation’s crop considered Poor to Very Poor and 75% of the corn and 72% of the soybeans rated Good to Excellent.  Given the ideal growing conditions this season in almost all regions, corn prices have nearly reached lows not seen for 4 years.  When comparisons are made from last year’s crop conditions report there are some striking differences to this year’s report for the same time period:


  • Iowa +18%
  • Illinois + 12%
  • Missouri +22%
  • Some increases found in Minnesota, Michigan, North Dakota, South Dakota and Wisconsin


More than half of the nation’s corn crop is expected to pollinate over the next couple of weeks with perfect weather conditions predicted during this critical stage so the hope of much heat stress driving the market higher has disappeared.  With the prices the lowest seen since the summer 2010 we have now officially fallen below what some considered simply a bullish 20% retracement.  This means according to one analyst, “we have now entered what is considered very real and very dangerous bear market territory.”   This corn marketing year is being compared to that of 2004.  That year December futures fell 25% from the close on July 3rd to the low that fall.  If those same price actions were to occur this year it would equate to futures close to $3.08!

Morgan Stanley has reduced their soybean rating from a “neutral” rating to a “neutral bearish” rating for soybean futures.  This same company has higher expectations though for corn, cotton, wheat and live cattle which offers a little hope.

Soybeans have been in a price free-fall for several days now and much of that has to do with the trader’s interpretation of USDA news.  The acreage report indicated a potential of 85 million + acres of soybeans, add that to the one of the best ever crop condition ratings and you get a recipe for plummeting prices.  Luckily good export demand continues, USDA announced yesterday that 347,000 MMT’s of new-crop soybeans have been sold to China, this is only a drop in the bucket though if the current projections of 46 to 46.5 bushels to the acre actually materialize. 

Yet another attempt to steal corn technology from U.S. companies was recently discovered and stopped.  A Chinese woman was attempting to hide stolen U.S. patented seed corn as boxes of microwave popcorn within her luggage on a flight from Chicago to Beijing for her husband, the founder and chairman of a conglomerate that runs a seed corn subsidiary.  DuPont Pioneer and Monsanto were both targets in this scheme that targeted seed fields in both Iowa and Illinois.




Please visit your county FSA office this week to certify your acres if you have not done so already.  Be sure you look over the maps for accuracy and send all copies to your insurance agent to update your policy with your plant dates.  The July 15 Deadline is only 1 week away.  Do Not Wait.



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