The U.S. corn and soybean crops are approaching harvest but remain vulnerable to frost damage in northern states, according to data released by the U.S. Department of Agriculture.
The USDA, in a weekly report, said 29% of the nation's corn crop was mature as of Sunday, below the five-year average of 33% for this time of year. Meanwhile, 15% of the soybean crop was dropping leaves, lagging the average of 27%. The crops aren't completely safe from frost until they are mature, which is indicated by dropping leaves in soybeans.
Traders are concerned about the potential for frost, which could limit output in states like Minnesota and North Dakota because forecasts call for temperatures to sink Thursday and Friday in the northern Midwest. Soybeans, in particular, are vulnerable because they were planted later in the spring than corn and will be harvested later this fall.
"You've got to have those beans survive a frost on Thursday, Friday to avoid seeing a potential hiccup in yield in those northernmost states," said Dave Marshall, an independent commodities broker in Illinois.
Some 9% of soybeans in Minnesota were dropping leaves as of Sunday, well below the five-year average of 30% for this time of year, according to the USDA. That means "there's 91% [of the crop] that theoretically might be at some risk" to frost, Marshall said. Minnesota's corn crop was 10% mature, down from the average of 20%.
It's not uncommon for farmers to lose bushels of corn and soybeans to frosts in northern states. Yet, the upcoming harvests are being watched closely because the crops have already suffered from hot, dry weather this summer. The USDA, in a monthly report Monday, cut its outlook for the corn harvest for the second month in a row due to the stressful conditions but unexpectedly raised its outlook for soybean output.
Soybean prices sank on the increase, with the most actively traded November contract sliding 2.2% to $13.96 a bushel at the Chicago Board of Trade. Corn for December delivery jumped 1.2% to $7.45 1/2 a bushel on crop concerns. Still, the monthly USDA report "wasn't negative the beans, especially if we lose bushels this week" to frost, said Mike Zuzolo, president of Global Commodity Analytics & Consulting.
"Beans are in the minds of nearly everyone with the frost potential," he said.
In other news, the USDA said farmers had started planting winter wheat for harvest next spring and summer, putting 6% of the crop in the ground as of Sunday. That was down from the five-year average of 10%, as dryness is slowing planting in the southern Plains. The USDA said 83% of the spring-wheat crop had been harvested as of Sunday, up from 68% a week ago but below the average of 87%.