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CME: Record-High Corn Condition Ratings

02 June 2010

US - Record-fast planting plus almost ideal weather add up to record-high corn condition ratings, according to today’s weekly Crop Condition report from USDA, write Steve Meyer and Len Steiner.

The report says that 77 per cent of corn acres are in either good or excellent condition as of Saturday. That number eclipses the rating for the corresponding week in the previous record YEAR but falls a bit short of the all-time higher (78 per cent) for this week back in 2007. Planting is virtually complete at 97 per cent and 85 per cent of planted corn has emerged. Jerry Gidel of North American Risk Management points out that all of the 18 key corn states were above 92 per cent planted as of this week with South Dakota (+11 per cent to 93 per cent), North Dakota (+12 per cent to 93 per cent), Ohio (+67 per cent to 94 per cent) making big gains last week.

CME Group Corn futures closed 3 to 5 cents/bushel lower BEFORE the Crop Condition report was released at 3:00 p.m. CDT. The primary reason for the weakness was a favorable forecast of warm days and widespread showers for this week.

Soybean planting continues to make progress as well with 74 per cent planted as of Saturday. That compares to 53 per cent last week and 63 per cent last year. Gidel of NARMS points out that Indian, Ohio, Missouri an the Dakotas could use some good weather conditions this week to complete bean seeding. This year’s pace is slightly slower than USDA’s reported 5-year average of 75 per cent but we hear of no major handwringing over this crop at this point. USDA has not yet published crop condition ratings for soybeans.

CME Group Soybean futures were down 4.25 to 7cents/bushel today — also before the report was released — on the same weather expectations. CME Soybean Meal futures were $3.20 to $4.40/ton lower. New crop December bean meal moved to within $6/ ton of its most recent low of $243/ton back on 11 March. Recall from yesterday’s DLR that soybean meal is MUCH more important to broiler producers than to other meat protein species. Falling soybean meal prices relative to corn prices provides a comparative advantage to chicken (and then turkey) relative to pork. Beef production uses comparably less soybean meal because ruminants can utilize lower-quality proteins and even non-protein nitrogen to synthesize the high-quality protein needed for growth and muscle deposition.

A personal note from CME Group and Daily Livestock Report: We want to wish our friend and colleague Jim Robb, Director of the Livestock Marketing Information Center and a LMIC employee for the past 19 years, the absolute best as he leaves LMIC for a new position at CoBank in Denver. CME Group is a long-standing member of LMIC — along with 28 state cooperative extension services, 6 USDA associate members and 8 industry group associate members — and has a great appreciation for the leadership Jim has provided. We know our paths will cross frequently and thank Jim for his long and effective service.

Readers may want to check out LMIC’s website, www.lmic.info for a number of resources regarding livestock markets. Both presenters at last week’s CME Group webinar on Dried Distillers’ Grains referred to a set of fact sheets on DDGs that can be found at the LMIC website. Just click on “Publications, fact-sheets, etc.” on the right side of the home screen to see those sheets. In addition, the public portion of the site includes key graphs and a handy link called “Quick Market Reports” that takes you to some of the most useful daily market reports from AMS. Another link goes straight to the websites of LMIC members — most of which are the leading market analysts at land-grant colleges across the country — and their periodic reports and market forecasts.

One item of note on the LMIC website today: A discussion of cattle, hog and lamb dressed weights. LMIC analysts note that cattle dressed weights usually decline through the first quarter of the year and reach seasonal lows in April or early May. While this year’s cattle weights have been lower than one year ago (and sometimes MUCH lower we might add), they have “held rather closely to the seasonal pattern.” LMIC believes that the seasonal low has been reached. Weekly data for all cattle show that dressed weights bottomed out in late April at 752 pounds. Last year’s low was in the first week of may at 768 pounds.

Please see page 2 of the link below for a CME Group Special Executive Report regarding amendments to the October 2011 Live Cattle futures contract which debuted today.

Further Reading

- You can view the full report by clicking here.


Daily Livestock Report - Copyright © 2008 CME. All rights reserved.


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