"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

Trader Dan's free work will soon be available at www.traderdan.biz

Monday, July 28, 2014

Corn and Bean Ratings see Slight Decline

This afternoon's USDA Crop ratings showed a slight bit of deterioration in the crops this week. Coming from the incredible conditions that they have held for much of this growing season, it is not unexpected to see some slight degrading of the crop at this point. None of it is serious however.

Corn rated in the Good/Excellent category fell 1% to 75% from last week's 76% - hardly a devastating decline. The rating decline came not from the Excellent category which remains the same as the previous week at 22% but from the Good category which gave up 1% falling to 53% from last week's 54%. The Fair category remained the same at 19% while the Poor category rose that same 1% to 5% from 4% the previous week.

My viewing of the report shows that the big three ( the "I's" as I prefer to call them - Iowa, Illinois and Indiana ) actually improved this past week or remained the same. Iowa index increased to 109 from 108; Illinois increased to 112 from 111 while Indiana remained the same at 108. Minnesota actually improved as well to 103 from 102. Nebraska dropped a point to 107 from 108.

The slight overall deterioration in the total index seemed to come from Kansas which fell to 100 from 103 and from Wisconsin which fell to 106 from 108. For the purpose of repetition, a rating of "100" is normal. As you can see, most of the big producing states still have some outstanding corn crops at this point.

As far as crop progress goes, 78% of the corn crop is in the silking stage compared to 67% last year and the 5-year average of 75%. 17% of the crop is in the dough stage compared to a mere 8% at this time last year and the 5-year average of 16%.

Switching to soybeans, 71% of the crop is rating Good/Excellent compared to 73% last week. In the big three, the Illinois crop improved to 109 from 108; Indiana lost a point to 105 from 106 and Iowa remained the same at 107. Minnesota and Wisconsin remained the same as the previous week.

As with corn, Kansas saw some deterioration of the crop falling to 102 from last week's 104 reading. Nebraska and North Dakota each lost a point to 105 and 107 respectively.

As far as crop progress goes, 76% of the crop is blooming versus 62% last year and the 5-year average of 72%. 38% of the crop is setting pods compared to only 18% last year and the 5-year average of 31%. As you can clearly see, the bean crop remains well ahead of schedule, something which is a positive given the recent talk of drier weather ahead.

I am not sure how much of this is already in the market after today's 20+ cent gains in the beans. Weather forecasts at this stage will have much more of an impact on the bean market than the corn market although the trade will still prefer to see some timely rains. From what I can see of the longer range forecasts, I do not see any intense heat at this point. It does look dry for the next week but without any severe heat. That will allow for corn to finish up pollination without any undue stress at this juncture.


  1. Hey, no worries. Under the "New Neutral", virtually an commodity price rise can be easily capped and collared by the mere threat of Fed jawboning.

    Exhibit A:

    Spectacular collapse in grains, with no words or threats of intervention whatsoever. They simply died on their own weight.

    Exhibit B:

    Energy futures totally collapse on in a vicious manner, despite geopolitical turmoil, with no "words" mentioned by the Fed Heads. Not even a threat of an SPR release.

    Exhibit C:

    Hog futures are about to witness a horrific collapse, as ultra cheap feed costs and an abundant harvest will make it super easy for the ranchers to start increasing their herds. Three years from now we'll be at a surplus.
    Longs better take profits now.

    Meanwhile, airline stocks like LUV continue to get hockey sticked into Outer Space.

    Consumer stocks like Under Armor going completely vertical.

    Bond prices remain very strong, cheap interest rates as far as the eye can see.

    This "Miracle Economy" will be studied for decades.

    I'm sure that the KWN contributors remain baffled, dazed, and confused, wondering how they completely missed it.

  2. http://www.youtube.com/watch?v=nWT5HM_NMlI

    Everything is fine...

    1. Hubert, thanks for the post. Very bad medicine indeed!

    2. Yes, this is not Paul Craig Roberts talking here. Glaziev is one of Putin's main advisors.
      And though I don't like Craig Roberts for systematically demonizing US government and praising Russia (as if it was a democracy!!), I agree with his single sentence :
      "Once the wheels of war begin to turn, momentum carries them forward."
      Let's cross fingers.

  3. Everything is glorious for the infamous rampfest that happens on Tuesdays.

    Virtually everything is going exactly as desired from the Fed:

    - Case/Shiller home prices up 9.3% vs. last year as the next housing bubble is right around the corner.

    - U.S. Stocks, bonds, dollar, all soaring

    - Commodities of every stripe are getting hammered.

    In a nutshell, everyone invested in stocks and bonds are getting richer and richer.

    The doom and gloom crowd investing in hyperinflation and betting on a stock market crash is getting killed.

    Stay in the system.

    Poor General Jim must be mortified watching his screens, probably hugging his 40 dogs right now.


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