The weekly USDA Crop Conditions and Progress reports were released this afternoon as they always are on Mondays' during the growing season. The results show the percentage of the corn crop rated Good/Excellent unchanged at 74% but even that masks the fact that the percentage rated Excellent jumped by 1% with the 1% drop coming from the Good category. A whopping 23% of the corn crop is rated Excellent. Think about that for a moment - nearly a full quarter of the crop has the highest rating possible!
As far as corn maturity goes, this recent weather has been ideal for the crop to begin catching up to its more usual maturity ratings at this time of the year. Remember, I have been maintaining that the reason for the lag in the crop maturity rate has everything to do with the exceptionally perfect weather and moisture levels for the plants which kept the plant from shutting down as it usually does when the weather tends to turn to its more seasonal dry period at this time of the year. My view is that while it keeps the plant from shutting down it also results in bigger kernels and even better ear fill. As long as that plant can put energy into those kernels, it will. That translates to bigger overall yields which I believe is going to be confirmed as the harvest results start multiplying.
However, to provide the numbers - 90% of the crop is now dented compared to 82% last week and 90% at the same time last year. The 5 year average is 92% so for all practical purposes, the crop is now catching up.
42% of the crop is mature versus 27% last week and 37% last year! Compared to last year, the crop is now ahead slightly in that regard. The 5-year average stands at 54%.
Harvest is at 7% compared to 7% last year ( dead even ) and the 5-year average of 15%. Good weather will help farmers make tremendous progress in areas where the crop is ready to go to the bin.
On the soybean front - there was a slight bit of deterioration this week with the percentage rated Good/Excellent dropping 1% to 71% from 72% last week. In going through the data state by state, it looks as if the minor decline came from Minnesota and Michigan ( northern tier states ) so perhaps some of that is indicative of some very mild frost damaged that occurred very early just ahead of the previous weekend and was reflected a bit later in the week when the surveyors had a chance to get out into the fields and take a look-see.
That being said, the Wisconsin crop actually improved to 49% Good from 48% last week and held steady at 24% Excellent from the previous week. North Dakota lost 1% in the Excellent category to 16% but it moved to the Good category which is now at 59% compared to last week's reading at 58%.
Still when you consider that Minnesota has 65% of its crop rated Good/Excellent with 27% rated fair, while Michigan has 61% rated at Good/Excellent and 26% Fair, it is quite a stretch to try to talk up prices by referring to frost damage with those kinds of ratings.
More important in my view is the fact that 45% of the crop is dropping leaves compared to 24% last week ( the number nearly doubled!) and 44% the same week last year. That is good news. The 5-year average is 53%.
On the harvest front - 3% of the crop is in the bin compared to 3% last year at this time and the 5-year average of 8%. One can definitely see the progress in the Delta which is running ahead of not only last year at this time but also ahead of the 5-year average. The harvesters are coming north!
Based on what I can see of the forecasts at this stage, they look very good on out into the first week of October. We should see some very good harvest progress in some areas. The warmth should also speed along those crops in the northern tier states.
We'll see how the Board reacts to this tomorrow but I find any bullishness in it missing.
Incidentally, changing gears a bit here to look at the mining shares as evidenced by the HUI, the index has fallen to support at the late May/early June lows of this year and looks very precarious. Also, that happens to nicely coincide with the top of the gap made on the chart to start the year when the shares jumped sharply to start of the new year.
The index is very close to surrendering the entirety of this year's gains. The way things stand at the moment, the gold shares are not exactly sending out a ringing endorsement of higher gold prices. The longer gold remains below $1220, the more the odds grow that it will revisit psychological round number support at $1200. If it changes handles, a test of the major low near $1180 will be coming shortly thereafter.
Note that the HUI/Gold ratio continues to plummet:
On the US Dollar front, traders seem a bit unwilling the take the greenback up through the 85 level basis USDX. If they do, gold will more than likely not hold $1200.
"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
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