09 July 2012 22:25 [Source: ICIS news]
HOUSTON (ICIS)--The quality ratings for the 2012 US corn and soybean crops were downgraded again as hot temperatures and a lack of rainfall continued in the midwest, data released by the US Department of Agriculture (USDA) indicated on Monday.
USDA's weekly Crop Progress Report said that as of 8 July, 36% of the corn planted in the 18 top-producing states was rated in good condition while 6% was rated as excellent, compared with ratings of 40% good and 8% excellent a week earlier.
The USDA said the percentage of the corn crop rated as poor now stands at 18% while 12% is rated as very poor.
The quality ratings for the soybean crop also dropped as the USDA said 35% of the crop was good while 5% was excellent, compared with ratings of 39% good and 6% excellent a week earlier.
The USDA said 27% of soybeans are now rated as poor or very poor.
Cooler temperatures with scattered rains across the Corn Belt this week should provide some relief, sources said.
December corn futures closed at $7.30/bushel on Monday at the Chicago Mercantile Exchange, up about 77 cents/bushel from a week earlier. November soybeans closed at $15.48/bushel, up $1.10/bushel from the close on 2 July.
USDA crop quality ratings are an indication of future crop yields. Lower quality ratings generally translate to lower yields and can be an optimistic 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 (10.6 litres) 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 ha) of corn and expect to harvest 88.9 m 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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