Yesterday, USDA reported that for the fourth week in a row, the condition of the U.S. corn crop continued to deteriorate.

In its weekly report, USDA said 48% of the corn crop is in “good” or “excellent” condition. This is below last week’s 56% and last year’s 69%. The condition of soybeans for this date also slipped with 45% in “good” or “excellent” condition vs. 53% last week and 66% last year.

“We believe the key concern weighing on shares of ag equipment OEMs is the potential for the North American ag equipment cycle to turn down in 2013. Despite strength in recent years, we are bullish on ag equipment stocks as our channel checks, including our recent 30th semi-annual ag dealer survey, suggest the cycle has longer legs than investors generally expect,” Henry Kirn, machinery analyst for UBS Investment Research said in a note.

“On crop condition concerns, nearest corn futures rose 10% last week, while soybeans and wheat rose 3% and 4%, respectively. Corn, soybean and wheat prices are now 8%, 16% and 29% above year-ago levels, respectively,” Kirn reported.

U.S. Crop Progress — July 2, 2012

Current Week Last Year Five-Year Average

Corn (% silking) 25% 5% 8%

Soybeans (% blooming) 26% 7% 12%

Spring Wheat (% headed) 73% 12% 35%

Winter Wheat (% harvest) 69% 49% 43%


Percent of Crop in “Good” or “Excellent” Condition —
July 2, 2012


Current Week Last Year Five-Year Average

Corn 48% 56% 69%

Soybeans 45% 53% 66%

Spring Wheat 71% 77% 70%

Winter Wheat na na na