Today, USDA reported that for the sixth week in a row, and the seventh of last eight weeks, the condition of the U.S. corn crop continued to deteriorate.

In its weekly report, USDA said that less than one-third, or 31%, of the corn crop is in “good” or “excellent” condition, an 9% decline from last week and less than half of last year’s 66%. The condition of soybeans for this date also slipped with only 34% in “good” or “excellent” condition vs. 40% last week and 64% on this date last year.

In a note to investors, Henry Kirn, machinery analyst for UBS Investment Research, said, “We expect North American farm equipment sales to grow in the second half of 2012. Corn, soybean and wheat prices remain well above historical averages. While USDA forecasts 2012 farm cash net income down 6.5% year-over-year, 2012 is still forecast as the second highest farm income year on record (behind only 2011).

Nearest corn futures rose less than 1% last week, while wheat rose 9%. Soybeans, however, declined 2%. Corn, soybean, and wheat prices are now 12%, 18%, and 28% above year-ago levels, respectively.

U.S. Crop Progress — July 16, 2012  
  Current Week Last Year Five-Year
Corn (% silking) 71% 28% 36%
Soybeans (% blooming) 66% 34% 42%
Spring Wheat (% headed) 94% 54% 77%
Winter Wheat (% harvest) 80% 64% 65%

Percent of Crop in “Good” or “Excellent” Condition —
July 16, 2012
  Current Week Last Year Five-Year
Corn 31% 40% 66%
Soybeans 34% 40% 64%
Spring Wheat 65% 66% 73%
Winter Wheat na na na