US soybean and corn crop quality deteriorates to 35-year low

The latest USDA crop condition report, published on 26th June, revealed a concerning trend of continuous decline in the conditions of the US soybean and corn crops due to the exceedingly hot and dry weather conditions prevailing across the Midwest.

In the week ending 25th June, 14% of the soybean crop was rated to be in poor-to-very poor condition, a decline of 2 percentage points (p.p) compared to the previous week’s rating and down by 6 p.p compared to the same period last year. With just 51% of the crop in good-to-excellent condition and in line with market expectations due to the sustained dryness in key growing states across the US, this represents a significant decline compared to the previous year’s rating of 65% during the same period.

Similarly, the US corn quality declined further, with only 50% of the crop now rated as good to excellent, representing a 5% decrease compared to the previous week. This decrease is also attributable to the exceedingly hot and dry weather conditions prevailing in the US, bringing the current crop condition to significantly worse levels when compared to the same period last year. At this time last year, a substantial 67% of the crop was rated as good to excellent, highlighting the magnitude of the condition concerns currently facing the market.

Despite market players initially reporting favourable planting conditions and smooth progress to Mintec, especially across the Midwest, the recent stretch of dry weather over the past weeks has raised significant concerns about the crops’ early development cycles. Market players have expressed apprehension that the dry and hot conditions may lead to greatly reduced yields during the harvests, potentially resulting in a much tighter soybean and corn balance sheet than initially anticipated at the time of plantings. Market players have informed Mintec that the current crop conditions have been the worst in the market since 1988.

Tags: soybean, US, crop, dry weather, quality, corn, USDA