Key Takeaways
CBOT corn for December delivery rose 1.5% to $4.81 a bushel after USDA data showed the biggest weekly drop in crop condition ratings for late July in 19 years.
"If we look at central U.S. soil moisture, July was a very warm and dry month, and so it was not the kind of month that the corn crop wanted," Dan Basse, president and founder of AgResource Company, said.
USDA rated 63% of the U.S. corn crop good to excellent, down 4 percentage points from the prior week and 10 points below last year's 73%. The last time ratings fell at least 4 points at this point in the season was 2007. Soybean conditions also deteriorated, dropping 3 points to 63% good to excellent, according to the agency's weekly Crop Progress report.
AgResource has trimmed its national corn yield estimate to 181 bushels per acre, down 2 bushels from its prior forecast, with Basse warning further cuts are possible if soil moisture continues to decline. The Bloomberg Agriculture Spot Index has climbed to a three-year high, while Bank of America has flagged rising grocery inflation risk as crop costs feed through to consumer prices.
Triple-digit heat indices swept across the Midwest and Plains late last week, with the damage concentrated in the western Corn Belt and Plains states. Colorado and North Carolina both reported about 41% of corn in poor-to-very-poor condition, the worst readings nationally. South Dakota stood at 23% poor to very poor, followed by North Dakota at 18% and Kansas at 17%, USDA data show.
Illinois, a top-three corn producer, showed 13% of its crop in poor-to-very-poor condition — a result Basse attributed more to June flooding than to the current dry spell. Iowa, the largest corn-growing state, bucked the trend with 80% of its corn rated good to excellent, the strongest reading among major producers.
DuWayne Bosse of Bolt Marketing, who farms near Britton, South Dakota, said the heat is trimming yield potential in the northern Plains. "I'm in South Dakota, one of the states that dropped a lot more than 4%," he said. "This crop is really going backwards. We're losing yield."
Bosse said the national corn yield could eventually fall to 175 to 176 bushels per acre, which would tighten supply-demand balances that were already not bearish at a 183-bushel estimate.
The crop deterioration comes less than a week after an options trader placed a $20 million bet on corn reaching its highest since 2023, buying 105,000 contracts of the November $5.50/$6 call spread — equivalent to more than 500 million bushels of corn. The trade reflected conviction that declining planted acreage, record export demand and heat stress would tighten supply.
CBOT soybeans for November delivery rose 0.5% to $12.19 3/4, and wheat for September delivery gained 0.7% to $6.64 3/4. The broader Bloomberg Agriculture Spot Index has reached a three-year high, reflecting tightening supply across multiple crop markets.
Forecasters expect cooler temperatures and scattered showers across the Corn Belt later this week, which could ease stress on the soybean crop — still in its critical pod-setting phase — but may come too late for corn, which is further along in development.
This article is for informational purposes only and does not constitute investment advice.
