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U.S. Soybeans in Best Shape Since 1994 on Midwest Weather

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July 22 (Bloomberg) -- The U.S. soybean crop is in the best shape for this time of year since 1994, while corn ratings are the highest in a decade as mild Midwest temperatures helped boost the outlook for yields.

Seventy-three percent of the U.S. soybean crop was rated in good or excellent condition as of July 20, the U.S. Department of Agriculture said yesterday. Seventy-six percent of corn earned the top rating, the most for this time of year since 2004.

Soybean prices tumbled 17 percent in the past 12 months, while corn entered a bear market on July 3. A lack of heat through the end of the Northern Hemisphere summer will limit threats during later stages of plant development, according to Commodity Weather Group LLC. Bigger U.S. crops are helping to keep global food inflation in check, with the United Nations reporting a third monthly drop for prices in June.

“The corn has been outstanding for a long time,” Mike Seery, the president of Seery Futures in Plainfield, Illinois, said in a telephone interview. “It’s healthy as a horse. Soybeans were very small about a week ago, and they’ve doubled or tripled in some areas. The weather has just been so phenomenal that it’s difficult to have a big rally.”

Soybean futures for November delivery fell 0.2 percent to $10.69 a bushel on the Chicago Board of Trade today. Prices reached $10.65 on July 11, the lowest for a most-active contract since Oct. 8, 2010. Corn dropped to $3.705 a bushel yesterday, the lowest since July 14, 2010.

Record Crops

U.S. soybean production will surge to an all-time high in the year that starts Sept. 1, and corn output will be the second-largest on record, the USDA said on July 11.

Corn yields in parts of southern Illinois are poised to reach a record 193.3 bushels per acre, 29 percent higher than the prior five-year average, according to estimates from this week’s Doane Advisory Services Co. Midwest crop tour. Soybean yields on the first day of the tour averaged 52.5 bushels per acre, 25 percent higher than last year.

While mild temperatures will aid crops, some of the Midwest may be drier than normal, though “perhaps not dry enough for a substantial yield threat,” Bethesda, Maryland-based Commodity Weather Group said in a report yesterday.

R.D. Wolheter, a 65-year old farmer who’s growing corn and soybeans on 4,000 acres near Wolcottville, Indiana, expects his yields for the grain to reach about 195 bushels.

“The corn for this time of year, it has tremendous potential,” Wolheter said in a telephone interview yesterday. “The soybeans, I think we have pretty good potential on them, but it’s hard to tell. It’s the August rains that will make the crop.”

To contact the reporter on this story: Megan Durisin in Chicago at mdurisin1@bloomberg.net

To contact the editors responsible for this story: Millie Munshi at mmunshi@bloomberg.net Patrick McKiernan, Thomas Kutty Abraham

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