On June 1, USDA released its weekly crop progress report. Plantings of the 2009 corn crop, at 93%, are slightly behind last year's pace (94%), as well as the 5-year average pace (97%). But the agency also reported that 70% of the corn crop was in "good" or "excellent" condition, compared with last year's 63%, and slightly ahead of the midpoint of expectations, which ranged from 60%-75% in "good" or "excellent" condition.

"Although down from the prior year, we note that corn, soybean and wheat prices remain well above historical averages and farmers are expected to remain profitable in 2009," says Henry Kirn, analyst for UBS.

"That said, we believe there is a risk that farm profitability in 2009 will be lower than in 2008 or 2007 (USDA forecasts net farm income to decline 20% year-over-year in 2009. Reduced farm profitability, coupled with above trendline farm equipment sales over the past few years, could lead to lower North American ag equipment demand in 2010."

At the same time corn, soybean and wheat futures prices rose over the past week, but remain below year-ago levels. The nearest expiring futures prices indicate:

Corn closed at $4.46 per bushel, up 4% from last week, but down 28% from last year.

Soybeans closed at $12.19 per bushel, up 3% from last week, but down 11% from last year.

Wheat closed at $6.75 per bushel, up 10% from last week, but down 14% from last year.