Ag Stocks Move Higher as USDA Report Indicates Worst Corn Crop in 25 Years (MOO)

July 3, 2012 11:37 AM EDT
Stocks in the Ag sector are trading strong Tuesday morning on the heels of a concerning crop progress report issued by the USDA on Monday. The Market Vectors Agribusiness ETF (NYSE: MOO) is up 1.7 percent at last check.

The USDA showed worsening conditions in both corn and soybeans. The report cited hot and dry weather around the nation.

Farmers surveyed said only 48 percent of corn was in "good" or "excellent" condition during the first week of July, down rather sharply from a reading of 56 percent in the prior week and compared to 69 percent during the same week last year. This was the worst reading in nearly 25 years. The price of corn is up 9.7 percent to $6.92 per bushel over the last week.

Soybeans considered in "very poor" or "poor" condition rose to 22 percent last week, versus just 15 percent in the prior week. Soybeans labeled as either in "good" or "excellent" condition fell from 53 percent in the previous week to 45 percent. The price of soybeans is up 3.4 percent to $15.32 per bushel over the last week.

Also potentially helping the sector this morning, an analyst at National Bank upgraded shares of Potash (NYSE: POT) and Agrium (NYSE: AGU) to Sector Perform.

Around the Ag group:
  • Potash shares up 2.4 percent
  • Agrium shares up 3.4 percent
  • Mosaic (NYSE: MOS) shares up 1.6 percent
  • Interpid Potash (NYSE: IPI) shares up 3.5 percent
  • CF Industries (NYSE: CF) shares up 2.8 percent

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