20 August 2012 22:25 [Source: ICIS news]
HOUSTON (ICIS)--The quality ratings for the 2012 US corn and soybean crops stopped declining last week as rains helped lessen drought conditions in parts of the midwest, data released by the US Department of Agriculture (USDA) indicated on Monday.
The USDA's weekly Crop Progress Report said that as of 19 August, 20% of the corn planted in the 18 top-producing states was rated in good condition while 3% was rated as excellent, the same percentages as reported a week earlier.
The USDA said the percentage of the corn crop rated as poor now stands at 25% while 26% is rated as very poor. The remaining 26% was rated as fair.
The quality ratings for the soybean crop improved a notch as the USDA said 27% of the crop was good while 4% was excellent compared with ratings of 26% good and 4% excellent a week earlier.
The USDA said 37% of soybeans are rated as poor or very poor, an improvement from the 39% rating of a week earlier. The remaining 32% was rated as fair.
On 10 August, the USDA forecast corn production at 10.8bn bushels, down 13% from 2011 and the lowest production since 2006.
Corn yields are expected to average 123.4 bushels/acre, down 23.8 bushels from last year.
Soybean production is forecast at 2.69bn bushels, down 12% from 2011, and the lowest since 2003.
December corn futures closed at $8.24/bushel on Monday at the Chicago Mercantile Exchange, up about 12 cents/bushel from a week earlier. November soybeans closed at $16.83/bushel, up about 30 cents/bushel from the close on 13 August.
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 gallons 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 gallons of biodiesel.
US growers this year have planted 96.4m acres (39.0m hectares) of corn and are now expected to harvest 87.4m acres, up 4% 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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