02 July 2012 22:26 [Source: ICIS news]
HOUSTON (ICIS)--The quality ratings for the 2012 US corn and soybean crops were downgraded from a week earlier, data released by the US Department of Agriculture (USDA) indicated on Monday.
USDA's weekly Crop Progress Report said as of 1 July, 40% of the corn planted in the 18 top-producing states was rated in good condition while 8% was rated as excellent, compared with ratings of 45% good and 11% excellent a week earlier.
The percentage of the corn crop rated as poor climbed to 15% compared with 10% a week earlier
The quality ratings for the soybean crop also dropped as the USDA said 39% of the crop was good while 6% was excellent compared with ratings of 45% good and 8% excellent a week earlier.
The percentage of soybeans rated poor increased to 15% compared with 11% a week earlier.
A drought spreading across the Corn Belt is taking a toll on crops.
December corn futures closed at $6.57/bushel on Monday at the Chicago Mercantile Exchange, up about 21 cents/bushel from Friday's close. November soybeans closed at $14.38/bushel, up 21 cents/bushel.
USDA crop quality ratings are an indication of future crop yields. Lower quality ratings generally translate to lower yields and can be a bullish signal to commodity traders.
In the US this year, about 5bn bushels of corn, about 40% of the annual crop, will be used in the production of ethanol. Each bushel of corn on average yields 2.8 gal of ethanol.
US soybean oil provides about 50% of the feedstock for the domestic production of biodiesel. One bushel of soybeans yields enough oil to produce 1.5 gal of biodiesel.
US growers this year have planted 96.4m acres (39.0m hectares) of corn and expect to harvest 88.9m acres, up 6% from last year, according to USDA estimates.
The USDA estimated that 73.9m acres of soybeans were planted this year, the third highest number of acres on record.
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