The condition of Iowa's corn crop is rated 4% very poor, 11% poor, 32% fair, 43% good and 10% excellent. The condition of Iowa's soybean crop is 11% poor, 33% fair, 45% good and 11% excellent. That's the report from the weekly weather and crop conditions survey, released June 30 by Iowa Ag Statistics Service in Des Moines, the government agency that is the Iowa field office of USDA's National Ag Statistics Service.

"While some areas of Iowa received more unneeded rain, much of the state experienced sunny and warm weather this past week that allowed field work to continue. Hopefully, the challenging weather and terrible flooding of earlier this month are behind us and farmers are able to get back to growing crops and caring for their animals," says Iowa Secretary of Agriculture Bill Northey.

Iowa had one of the wettest Junes ever

Soybean planting is virtually complete, according to the survey. Soybeans are 92% emerged statewide, which is 8% behind last year and the 5-year average. First cutting of alfalfa is 83% complete, and 68% of the oat crop was at or beyond heading stage and 8% of the oat acreage was turning color, which is one week behind normal. Oats condition rates 2% very poor, 6% poor, 36% fair, 45% good and 11% excellent. Pasture condition rates 2% very poor, 5% poor, 27% fair, 51% good and 15% excellent.

Although there hasn't been a lot of rain in the past few days in eastern Iowa, there has been some in southwest Iowa. When the weather data comes in for the end of June, the state average for the month will likely show that June 2008 was the second or third wettest June on record in Iowa, says Harry Hillaker, state climatologist for the Iowa Department of Agriculture. Through the last several days of June, temperatures have been running on the cool side of normal.

USDA releases June 30 Acreage Report

USDA also released its survey results for planted acreage of corn and soybean on June 30. The corn number at 87.3 million acres for the U.S. is well above the trade's guess—1.65 million acres above. So corn prices reacted negatively.

Soybeans at 74.5 million U.S. acres are right at the trade guess but the focus has quickly shifted to harvested acres for both of these crops. There's a bullish spin on that for the marketplace.

Is the flood damage part of that lower than expected acreage? Will there be acres that won't get harvested that might have been planted? "Definitely," says Kurt Koester, market analyst with AgriSource, a marketing advisory firm in Des Moines. "We've looked some states like Iowa and surrounding states that have been impacted by flooding. We see some room for adjustment. Some of it's been accounted for already. But here's what we're looking at."

Acreage numbers questionable for 2008

In Iowa USDA is saying we've only lost about 3% of the planted acreage for corn and soybeans in total, and zero percent in Minnesota, 5% in Illinois, 6% in Missouri. These estimates seem low considering a lot of the other estimates that have been floating around, he says. If the farmer doesn't know how many acres they are not going to harvest, neither does the government.

For example, prevented planting option for crop insurance is still up in the air. A lot of farmers as of June 30 are still undecided what they are going to do with that option in their crop insurance, notes Koester.

Corn is past the deadline for any changes with prevented planting. Where are we with soybeans? "Soybeans are in the late planting period in Iowa for crop insurance purposes," he says. "That started on June 15. So every day they go beyond and are not planted, that is a 1% reduction in the yield guarantee. So the last planting date for soybean coverage is July 10."

Price direction is wide open—be patient

What is he telling his customers that they should be doing regarding grain marketing? The price direction from here is wide open. There are so many variables. There is government intervention hanging over the market as a possibility. "So we're basically telling farmers now, be patient," he says.

"Look at the soybean numbers this morning and we are bullish there. Beans hit a new contract high for all time this morning--$16.02 per bushel for beans. That's understandable. You plug in last year's U.S. soybean yield of 41 bushel per acre with these lower harvested acres for 2008 that USDA is projecting, and you can see that we would literally run out of soybeans a year from now. So we think patience is the preferred marketing strategy for farmers now."

"We will watch to see if there is any government intervention. It appears CRP coming open could be the first step," he adds. "But it takes time before the land could be brought into production. There is about 13 million U.S. acres available in the CRP in the next 3 years, but what kind of shape is that ground in?"