The government’s first crop ratings for this year’s U.S. corn crop underscored a bountiful production outlook, analysts said.
A total of 67 percent of corn acreage in 18 top growing states was rated “good” or “excellent” for the week ended May 16, the U.S. Department of Agriculture said in a report today.
Such a rating would be “great for any time in the year,” said Brian Hoops, an analyst with Midwest Market Solutions, Inc., in Yankton, S.D. “We expect ratings to be fairly high because of the early seedings and benefits of favorable weather in most parts of the country.”
Of the rest of the corn acreage surveyed, 27 percent was rated “fair,” 5 percent was rated “poor” and 1 percent was rated “very poor,” the USDA said.
The combined good-to-excellent ratings, which comprise the top two of five categories tracked by the USDA, are closely-followed crop health indicators for grain traders and analysts.
Last year, the USDA didn’t release crop condition ratings for corn until June 1, after an unusually wet spring delayed planting. In that report, the USDA rated 70 percent of U.S. corn acreage in good to excellent condition.
This year, a dry spring allowed farmers to get most of their corn and soybeans in the ground early. That’s reinforced prospects for record production, and signals abundant feed supplies and cheaper costs for livestock producers.
“High crop ratings will likely mean lower feed costs,” Hoops said. “That usually translates to lower cash prices for hogs and cattle as well,” as producers expand herds.
Corn prices have fallen this spring as it became apparent farmers were on their way to another large crop.
In trading today, corn futures for December delivery fell 6 ¼ cents to $3.74 ¼ a bushel, near a three-week low. The contract is down 15 percent this year.
U.S. farmers are projected to harvest a record 13.37 billion bushels of corn this year, the USDA said in a May 11 report. This year’s projected harvest would be up 2 percent from last year’s 13.11-billion bushel crop, the current record.
As of May 16, 87 percent of the corn acreage was planted, compared with the five-year average of 78 percent for that date, the USDA said last week. Soybeans were 38 percent planted, compared with the five-year average of 35 percent.
Fifty-five percent of the corn crop had emerged as of May 16, compared to the five-year average of 39 percent, the USDA said.
While corn and soybean crops are off to a strong start, there is still the possibility that drought or other adverse weather over the summer could trim production, analysts caution.
“The crop year has gone swimmingly so far but timely rain and sufficient heat units are still needed for these bumper crop forecasts to be realized,” analysts Steve Meyer and Len Steiner wrote in CME Group’s Daily Livestock Report last week.