Fundamentally Speaking

Earlier this week the USDA reported in its first soybean condition report of the year that 67% of the crop was in good or excellent shape, less than the 70% expected by the trade.

This graphic shows the combined good and excellent ratings reported in the initial USDA weekly crop ratings for soybeans on the left hand axis along with the figure from our usual ratings system where we weight the crop based on the percent in each category and assign that category a factor of 0.2 for very poor, 0.4 for poor, 0.6 for fair, 0.8 for good, and 1.0 for excellent and then sum the results.

On the right-hand axis is the percent that the final U.S. soybean yield deviated from the 30-year trend.

The combined good and excellent rating at 67% for the first soybean condition report of the year is just slightly above the 1990-2020 average of 65% while our usual ratings system figure of 74.0 is essentially at the 30-year average of 73.5.

To be truthful, first week crop conditions have a very low correlation to final yields (in the neighborhood of 16-18%) as there have been years where we have had record national soybean yields even with low early season ratings and vice-versa.

Consistent with the huge difference between what is being seen in the north and western parts of the U.S., which is hot and dry, vs. the south and east, which is wet and cool, is the fact that 32% of North Dakota's crop is rated either very poor or poor and 12% of the South Dakota crop due to drought.

10% of the Louisiana crop is rated poor due to excess moisture, 73% of the Bayou State has soybeans rated good or excellent with AK 74% good or excellent, 83% in KY, 85% in MS and 80% in TN.

Soybeans are more geographically dispersed than corn, where plantings are more concentrated in the Corn Belt with the Dakotas having 10% of U.S. seeded corn area this year.

A lot of beans are planted in the Southeast, Delta and southern Midwest so bean crop conditions next week should not decline nearly to the degree that is anticipated for the corn crop conditions.

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