Iowa Public Television

 

Crops Condition Continues Slide

posted on August 10, 2001


Hello, I'm Mark Pearson.

For years the nation's financial community worried about inflation. But now there IS rising angst over whether the economy can begin growing again.

Last month inflation at the producer level fell at the fastest pace in nearly eight years. Consumer credit use has fallen for the first time in nearly four years.

The slowing economy has not been good to corporate bottom lines. Earnings reports have failed to show much growth and Wall Street seems to be awakening to the fact the economy may have been cooled to the point of recession.

In farm country the story is much the same, but distilled to the basic fundamentals of supply and demand.

 

Crops Condition Continues Slide

The combination of hot and dry weather has been eroding the condition of grain, oilseed and fiber crops for weeks.

In the cornbelt at the beginning of a week that continued to be hot and dry only 60 percent of the U.S. corn crop was rated good or excellent down from 64 percent a week ago. The condition of the soybean crop has also deteriorated. Fifty seven percent of the crop was rated to be good or excellent, compared to 57 percent a week ago. And the condition of cotton crop continued to slide. Forty-nine percent is rated good or excellent.

Slug: markets

And for much of the week grain and oilseed markets rallied on weather, although cotton prices fell from simple lack of demand and expectations of a more than ample crop despite current crop conditions. On Friday the government issued its estimate of this year's harvest.

The government expects this year's corn crop to yield 9.27 billion bushels – 7 percent below last year's harvest and the lowest production in 4 years.

The USDA projects a soybean harvest of 2.87 billion bushels, four percent greater than last year. If realized the harvest would be a record.

The story is much the same for cotton. The USDA projects a 20-million bale harvest. If realized it would be the highest cotton harvest on record.

And even though the nation's winter wheat crop is in the bin, the harvest seems to be growing. The government now says winter varieties produced 1.39 billion bushels, up one percent from a month ago, but still 11 percent below last year's harvest.

But Friday's grain and oilseed markets saw the numbers as bullish. The government's numbers were below most trade expectations and because the government's guess was formed August 1st most of the trade believes weather has taken yield from crops since then.

Grain and Oilseed markets were sharply higher on Friday's opening following the release of the government numbers. Market sentiment was buttressed by another government report showing stocks of grain and oilseeds were lower than expected. The trade also anticipates demand to strengthen a bit in the months ahead, especially if the dollar should weaken, making American exports cheaper.


Tags: agriculture crops markets news