===============================================================

                        UNITED STATES
             SECURITIES AND EXCHANGE COMMISSION
                  WASHINGTON, D.C.  20549

                         FORM 10-Q


   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
             SECURITIES EXCHANGE ACT OF 1934

        For the quarterly period ended July 31, 1998

              Commission file no: 1-6458
              ___________________________

            JOHN DEERE CAPITAL CORPORATION

        Delaware                         36-2386361
(State of incorporation)     (IRS employer identification no.)

            1 East First Street, Suite 600
                 Reno, Nevada  89501
       (Address of principal executive offices)

          Telephone Number:  (702) 786-5527
          _________________________________


    Indicate by check mark whether the registrant (1) has filed 
all reports required to be filed by Section 13 or 15(d) of the 
Securities Exchange Act of 1934 during the preceding 12 months 
(or for such shorter period that the registrant was required to 
file such reports), and (2) has been subject to such filing 
requirements for the past 90 days.
Yes  x  No  

    At July 31, 1998, 2,500 shares of common stock, without par 
value, of the registrant were outstanding, all of which were 
owned by John Deere Credit Company, a wholly-owned subsidiary 
of Deere & Company.

    The registrant meets the conditions set forth in General 
Instruction H(1)(a) and (b) of Form 10-Q and is therefore 
filing this Form with certain reduced disclosures as permitted 
by those instructions.
===============================================================
                     Page 1 of 16 Pages
                Index to Exhibits:  Page 14


<PAGE>
             PART I.    FINANCIAL INFORMATION

Item 1.  Financial Statements

         John Deere Capital Corporation and Subsidiaries
     Statements of Consolidated Income and Retained Earnings
                         (Unaudited)
                         (in millions)

                                  Three Months    Nine Months 
                                     Ended           Ended
                                    July 31,         July 31,
                                ------------------------------
                                 1998    1997    1998    1997
Revenues                        ------  ------  ------  ------
  Finance income earned 
    on retail notes             $112.1  $111.1  $323.7  $306.7
  Revolving charge account 
    income                        30.4    26.6    80.3    71.2
  Lease revenues                  51.1    32.4   135.6    82.8
  Finance income earned on 
    wholesale notes               15.8    12.3    44.1    36.0
  Net gain on retail notes sold    4.3     7.4    16.9     9.2
  Interest income from 
    short-term investments         1.9     2.6     6.9     7.6
  Securitization and servicing 
    fee income                     6.4     5.9    20.8    23.5
  Other income                     4.4     2.0     9.8     5.9
--------------------------------------------------------------
      Total revenues             226.4   200.3   638.1   542.9
--------------------------------------------------------------
Expenses
  Interest expense:               95.3    86.6   274.7   236.7

  Operating expenses:        
    Administrative and 
      operating expenses          29.1    25.9    84.1    74.6
    Provision for credit losses    7.9     8.8    32.4    25.0
    Fees paid to Deere & Company   2.4     1.9     8.3     6.3
    Depreciation of equipment on 
        operating leases          30.3    18.8    79.1    50.6
--------------------------------------------------------------
      Total operating expenses    69.7    55.4   203.9   156.5
--------------------------------------------------------------
      Total expenses             165.0   142.0   478.6   393.2
--------------------------------------------------------------
Income of consolidated group 
  before income taxes             61.4    58.3   159.5   149.7
Provision for income taxes        21.6    20.3    56.2    52.1
--------------------------------------------------------------
Income of consolidated group      39.8    38.0   103.3    97.6
Equity in income (loss) of 
  unconsolidated affiliate          .1     (.2)     .1    (1.1)
--------------------------------------------------------------
Net income                      $ 39.9  $ 37.8  $103.4  $ 96.5
Cash dividends declared          (12.5)  (20.0)  (37.5)  (60.0)
Retained earnings at beginning 
  of period                      743.7   663.1   705.2   644.4
---------------------------------------------------------------
Retained earnings at end 
  of period                     $771.1  $680.9  $771.1  $680.9
===============================================================

          See Notes to Interim Financial Statements.

Page 2

<PAGE>

       John Deere Capital Corporation and Subsidiaries
               Consolidated Balance Sheets
                     (Unaudited)
                (dollars in millions)

                               July 31,   October 31,  July 31,
                                 1998        1997        1997
Assets                         --------    --------    --------
  Cash and cash equivalents    $  175.9    $  204.4    $  187.0
  Receivables and leases:
    Retail notes                4,521.7     4,349.4     4,499.0
    Wholesale notes               725.8       593.4       522.7
    Revolving charge accounts     730.6       618.5       613.2
    Financing leases              234.2       214.6       208.2
---------------------------------------------------------------
      Total receivables         6,212.3     5,775.9     5,843.1
    Equipment on operating 
      leases -- net               826.2       527.2       459.8
---------------------------------------------------------------
      Total receivables 
        and leases              7,038.5     6,303.1     6,302.9
    Allowance for credit losses   (86.1)      (85.9)      (89.3)
---------------------------------------------------------------
      Total receivables 
        and leases -- net       6,952.4     6,217.2     6,213.6
---------------------------------------------------------------
    Other receivables             152.7       157.9       144.4
    Investment in 
      unconsolidated affiliates    18.9        12.8         8.4
    Other assets                   70.8        66.8        72.1
---------------------------------------------------------------
Total Assets                   $7,370.7    $6,659.1    $6,625.5
===============================================================
Liabilities and Stockholder's Equity
  Short-term borrowings:
    Commercial paper           $1,968.2    $1,991.9    $2,382.8
    Deere & Company               290.6       349.9       123.6
    Current maturities of 
      long-term borrowings      1,997.5     1,042.5       618.8
    Other notes payable             7.5         2.4         1.8
---------------------------------------------------------------
      Total short-term 
        borrowings              4,263.8     3,386.7     3,127.0
---------------------------------------------------------------
  Accounts payable and accrued 
      liabilities:
    Accrued interest on 
      senior debt                  65.8        39.2        51.4
    Other payables                216.4       188.3       165.8
---------------------------------------------------------------
      Total accounts payable 
        and accrued liabilities   282.2       227.5       217.2
---------------------------------------------------------------
  Deposits withheld from 
    dealers and merchants         151.0       144.2       134.0
---------------------------------------------------------------
  Long-term borrowings:
    Senior debt                 1,640.3     1,782.9     2,203.7
    Subordinated debt             150.0       300.0       150.0
---------------------------------------------------------------
      Total long-term 
        borrowings              1,790.3     2,082.9     2,353.7
---------------------------------------------------------------
      Total liabilities         6,487.3     5,841.3     5,831.9
---------------------------------------------------------------
  Stockholder's equity
    Common stock, without par value
      (issued and outstanding -- 
      2,500 shares owned by John 
      Deere Credit Company)       112.8       112.8       112.8
    Retained earnings             771.1       705.2       680.9
    Cumulative translation 
        adjustment                  (.5)        (.2)        (.1)
---------------------------------------------------------------
      Total stockholder's 
        equity                    883.4       817.8       793.6
---------------------------------------------------------------
Total Liabilities and 
  Stockholder's Equity         $7,370.7    $6,659.1    $6,625.5
===============================================================

           See Notes to Interim Financial Statements.

Page 3

<PAGE>

        John Deere Capital Corporation and Subsidiaries
            Statements of Consolidated Cash Flows
                        (Unaudited)
                      (in millions)

                                     Nine Months Ended July 31
                                     -------------------------
                                         1998           1997
                                     -------------------------
Cash Flows from Operating Activities:
  Net income                          $   103.4      $    96.5
  Adjustments to reconcile net 
    income to net cash provided
    by operating activities:
  Provision for credit losses              32.4           25.0
  Provision for depreciation               81.3           50.5
  Equity in loss (income) of 
    unconsolidated affiliates               (.1)           1.1
  Other                                    40.2           24.4
--------------------------------------------------------------
    Net cash provided by 
      operating activities                257.2          197.5
--------------------------------------------------------------
Cash Flows from Investing Activities:
  Cost of receivables and 
    leases acquired                    (5,591.4)      (4,734.4)
  Collections of receivables            3,909.8        3,562.9
  Proceeds from sales of receivables      804.9          433.0
  Other                                    41.3           26.7
--------------------------------------------------------------
    Net cash used for investing 
      activities                         (835.4)        (711.8)
--------------------------------------------------------------
Cash Flows from Financing Activities:
  Change in commercial paper              (23.7)         692.9
  Change in receivable/payable 
    with Deere & Company                  (57.7)        (411.9)
  Increase in other notes payable           5.1            1.8
  Proceeds from issuance of 
    long-term borrowings                  996.0          885.0
  Principal payments on 
    long-term borrowings                 (332.5)        (577.5)
  Dividends paid                          (37.5)         (60.0)
--------------------------------------------------------------
    Net cash provided by 
      financing activities                549.7          530.3
--------------------------------------------------------------
Net increase (decrease) in cash and 
  cash equivalents                        (28.5)          16.0
Cash and cash equivalents 
  at the beginning of period              204.4          171.0
--------------------------------------------------------------
Cash and cash equivalents 
  at the end of period                $   175.9      $   187.0
==============================================================

         See Notes to Interim Financial Statements.

Page 4

<PAGE>

        John Deere Capital Corporation and Subsidiaries
             Notes to Interim Financial Statements

(1)  The consolidated financial statements of John Deere 
Capital Corporation (Capital Corporation) and its subsidiaries 
(the Company) have been prepared by the Company, without audit, 
pursuant to the rules and regulations of the Securities and 
Exchange Commission. Certain information and footnote 
disclosures normally included in annual financial statements 
prepared in accordance with generally accepted accounting 
principles have been condensed or omitted as permitted by such 
rules and regulations. All adjustments, consisting of normal 
recurring adjustments, have been included. Management believes 
that the disclosures are adequate to present fairly the 
financial position, results of operations and cash flows at the 
dates and for the periods presented. It is suggested that these 
interim financial statements be read in conjunction with the 
financial statements and the notes thereto included in the 
Company's latest annual report on Form 10-K. Results for 
interim periods are not necessarily indicative of those to be 
expected for the fiscal year.

The preparation of financial statements in conformity with 
generally accepted accounting principles requires management to 
make estimates and assumptions that affect the reported amounts 
and related disclosures. Actual results could differ from those 
estimates.

(2)  The principal business of the Company is providing and 
administering financing for retail purchases of new and used 
equipment manufactured by Deere & Company's agricultural, 
construction and commercial and consumer equipment divisions. 
The Company purchases retail installment sales and loan 
contracts (retail notes) from Deere & Company and its wholly-
owned subsidiaries (collectively called John Deere). John Deere 
acquires these retail notes through independent John Deere 
retail dealers. The Company also purchases and finances certain 
agricultural, construction and lawn and grounds care retail 
notes unrelated to John Deere. In addition, the Company 
purchases and finances recreational product retail notes 
acquired from independent dealers and marine product mortgage 
service companies (recreational product retail notes). The 
Company also leases equipment to retail customers, finances and 
services revolving charge accounts acquired from and offered 
through merchants in the agricultural, construction, lawn and 
grounds care and yacht markets (revolving charge accounts), and 
provides wholesale financing for inventories of recreational 
vehicles, manufactured housing units, yachts, John Deere 
engines, and John Deere agricultural and John Deere construction 
equipment owned by dealers of those products (wholesale notes). 
Retail notes, revolving charge accounts, direct financing leases 
and wholesale notes receivable are collectively called 
"Receivables." Receivables and operating leases are collectively 
called "Receivables and Leases."

(3)  The Company's ratio of earnings to fixed charges was 1.63 
to 1 for the third quarter of 1998 compared with 1.66 to 1 for 
the third quarter of 1997. The consolidated ratio of earnings 
to fixed charges was 1.57 to 1 for the first nine months of 
1998 and 1.63 to 1 for the first nine months of 1997. 
"Earnings" consist of income before income taxes, the 
cumulative effect of changes in accounting and fixed charges. 
"Fixed charges" consist of interest on indebtedness, 
amortization of debt discount and expense, an estimated amount 
of rental expense under capitalized leases which is deemed to 
be representative of the interest factor and rental expense 
under operating leases.

(4)  Beginning in September 1997, certain notes from dealers 
for the financing of "purchase-for-rental" equipment were 
considered wholesale notes. Prior to that time, such notes were 
considered retail notes. During the first nine months of 1998, 
$142 million of these wholesale notes were acquired. Prior 
period volumes and ending balances have not been adjusted to 
reflect this change in policy. 

(5)  In June 1998, the FASB issued Statement No. 133, 
Accounting for Derivative Instruments and  Hedging Activities, 
which the Company will adopt in fiscal year 2000. This 
Statement is not expected to have a material effect on the 
Company's financial position or results of operations.

Page 5

<PAGE>

Item 2.    Management's Discussion and Analysis of Financial
           Condition and Results of Operations.

Results of Operations

Net income was $39.9 million in the third quarter of 1998 and 
$103.4 million for the first nine months of 1998 compared with 
$37.8 million and $96.5  million for the same periods last 
year. Third quarter and year-to-date earnings reflect higher 
income from an 11 percent increase in the average balance of 
Receivables and Leases financed during the first nine months. 
These results were partially offset by higher operating 
expenses and narrower financing spreads. In addition, the year-
to-date earnings benefited from higher gains on the sales of 
retail notes.

Revenues totaled $226.4 million and $638.1 million for the 
third quarter and for the first nine months of 1998, 
respectively, compared to $200.3 million and $542.9 million for 
the same periods a year ago. Revenues increased due to 
continued growth in operating leases, retail notes on John 
Deere equipment, wholesale notes and revolving charge accounts. 
Lease revenues increased $52.8 million to $135.6 million in the 
first nine months of 1998, from $82.8 million in the first nine 
months of 1997, largely due to increased leasing volumes as a 
result of a number of leasing incentives related to John Deere 
agricultural and construction equipment. Finance income earned 
on retail notes increased $17.0 million to $323.7 million for 
the first nine months of 1998 compared to $306.7 million for 
the same period in 1997. This increase was primarily due to a 
larger average retail installment portfolio financed. Finance 
income earned on wholesale notes increased $8.1 million to 
$44.1 million for the first nine months of 1998 from $36.0 
million earned in the first nine months of 1997. The higher 
finance income earned on wholesale notes was primarily a result 
of increased activity for John Deere agricultural, 
construction, and lawn and grounds care equipment owned by 
dealers as well as a larger yacht wholesale portfolio (see note 
4 to the interim financial statements for additional 
information.). Revolving charge accounts continued to benefit 
from strong demand for financing in the agricultural market.

Gains on the sales of retail notes totaled $4.3 million and 
$16.9 million for the third quarter and for the first nine 
months of 1998, respectively, compared to $7.4 million and $9.2 
million for the same periods a year ago. Additional sales of 
retail notes are expected to be made in the future.

Total interest expense for the third quarter increased from 
$86.6 million in 1997 to $95.3 million in 1998. Interest 
expense increased from $236.7 million for the first nine months 
of 1997 to $274.7 million for the first nine months of 1998. 
These increases in interest expense were primarily the result 
of increased borrowings required to finance the higher average 
portfolio of Receivables and Leases. Total average borrowings 
during the first nine months of 1998 were $5.836 billion, 
compared to $5.310 billion in the first nine months of 1997. 
The weighted average interest rate on total borrowings for the 
nine months ended July 31, 1998 and 1997 were 6.13 percent and 
6.03 percent, respectively.

Administrative and operating expenses were $29.1 million in the 
third quarter of 1998 and $84.1 million for the first nine 
months of 1998, compared with $25.9 million and $74.6 million 
for the same periods in 1997. These increases were the result 
of higher employment costs associated with administering a 
larger Receivable and Lease portfolio. Depreciation of 
equipment on operating leases increased to $30.3 million in the 
third quarter of 1998 and $79.1 million for the first nine 
months of 1998, compared to $18.8 million and $50.6 million for 
the same periods in 1997, as a result of the increase in 
operating leases financed. 

During the third quarter and the first nine months of 1998, the 
provision for credit losses totaled $7.9 million and $32.4 
million, respectively, compared with $8.8 million and $25.0 
million in the same periods last year. The increase in the 
year-to-date provision for credit losses was primarily the 
result of increases in agricultural and construction retail 
note and lease write-offs in 1998 and an increase in the 
average portfolio of Receivables and Leases financed. The 
annualized provision for credit losses, as a percentage of the 
total average portfolio outstanding, was .45 percent for the 
third quarter of 1998 and .64 percent for the first nine months 
of 1998, compared with .55 percent and .56 percent for the same 
periods last year. 

Page 6

<PAGE>

Receivable and Lease acquisition volumes were as follows 
(dollars in millions):

                            Three Months
                           Ended July 31,
                          ----------------
                           1998      1997     $ Chng     % Chng
                          -------------------------------------
Retail note volumes:
  Agricultural equipment  $  565    $  459    $  106        23%
  Construction equipment     123        92        31        34 
  Lawn and grounds care 
    equipment                 71        53        18        34
  Recreational products      106        60        46        77
                          ---------------------------
    Total retail note 
      volumes                865       664       201        30
Wholesale notes              403       279       124        44
Revolving charge accounts    535       463        72        16
Financing leases              43        32        11        34
Equipment on operating
  leases                     155        93        62        67
                          ---------------------------
    Total Receivable and
      Lease volumes       $2,001    $1,531    $  470        31
                          ===========================


                            Nine months
                           Ended July 31,
                          ----------------
                           1998      1997     $ Chng     % Chng
                          -------------------------------------
Retail note volumes:
  Agricultural equipment  $2,010    $1,909    $  101         5%
  Construction equipment     329       277        52        19 
  Lawn and grounds care 
    equipment                138       111        27        24
  Recreational products      271       270         1         0
                          ---------------------------
    Total retail note 
      volumes              2,748     2,567       181         7
Wholesale notes            1,077       791       286        36
Revolving charge accounts  1,232     1,018       214        21
Financing leases              95        85        10        12
Equipment on operating 
  leases                     439       274       165        60
                          ---------------------------
    Total Receivable and 
      Lease volumes      $ 5,591   $ 4,735    $  856        18
                         ============================


Total Receivables and Leases held were as follows (in 
millions):

                         July 31,  October 31,  July 31,
                           1998       1997        1997
                         -------------------------------
Retail notes held:      
  Agricultural equipment $ 2,800    $ 2,556     $ 2,736 
  Construction equipment     682        660         637 
  Lawn and grounds care 
    equipment                256        216         207 
  Recreational products      783        917         919 
                         ------------------------------
    Total retail notes 
      held                 4,521      4,349       4,499 
Wholesale notes              726        593         523 
Revolving charge accounts    731        619         613 
Financing leases             234        215         208
Equipment on operating
  leases                     826        527         460
                         ------------------------------
    Total Receivables and 
      Leases held        $ 7,038    $ 6,303     $ 6,303 
                         ==============================

Page 7

<PAGE>

For the third quarter and first nine months of 1998, 
agricultural retail note volumes increased 23 percent and 5 
percent, respectively, compared to last year. Construction and 
lawn and grounds care retail notes increased in both periods of 
1998 over 1997. Recreational product retail note volumes 
increased 77 percent in the third quarter of 1998, yet remained 
approximately the same year-to-date. The increase in the third 
quarter was due to a higher level of recreational vehicle 
retail note volume.

Revolving charge account volumes increased in the third quarter 
and first nine months of 1998 compared to 1997, primarily due 
to increases in agricultural operating loans and Farm Plan. 
Wholesale note volumes also increased due to higher volumes of 
agricultural dealer purchase-for-rental notes and construction 
and recreational vehicle floor planning notes. Operating lease 
volumes continued to increase significantly over last year due 
to agricultural low-rate and guaranteed residual value leasing 
programs sponsored by the Company or John Deere.

Receivables and Leases administered by the Company, which 
include retail notes previously sold, were as follows (in 
millions):

                               July 31,  October 31,  July 31,
                                 1998       1997        1997
                               -------------------------------
Receivables and Leases
  administered:      

  Receivables and Leases
     owned by the Company      $ 7,038    $ 6,303     $ 6,303 
  Retail notes sold and
     securitized (with
     recourse)*                  1,246      1,314       1,040 
  Retail notes sold
     (without recourse)            183        ---         ---
                               -------------------------------
    Total Receivables and
      Leases administered      $ 8,467    $ 7,617     $ 7,343
                               ===============================
 
* The Company's estimated maximum exposure under all retail 
note recourse provisions at July 31, 1998 was $166 million.


Total Receivable and Lease amounts 60 days or more past due, by 
product and as a percentage of total balances held were as 
follows (dollars in millions):

                        July 31,     October 31,    July 31,
                         1998           1997          1997
                      -----------------------------------------
                      Dollars   %    Dollars  %    Dollars  %
                      -----------------------------------------
Retail notes:            
  Agricultural 
    equipment         $ 8.6    .31%  $ 6.8   .27%  $ 7.2   .26%
  Construction 
    equipment           2.0    .29     2.0   .31     2.4   .38
  Lawn and grounds 
    care equipment       .7    .29      .6   .28      .7   .33
  Recreational 
    products             .2    .02      .3   .03      .1   .01
                      -----          -----         -----
    Total retail 
      notes            11.5    .25     9.7   .22    10.4   .23
Wholesale notes         1.3    .18     2.0   .33     1.2   .23
Revolving charge 
  accounts              7.2    .98     8.3  1.34     9.4  1.54
Leases                  3.4    .32     2.0   .27     2.3   .35
                      -----          -----         -----  
    Total Receivables 
      and Leases      $23.4    .33   $22.0   .35   $23.3   .37
                      =====          =====         =====

Page 8

<PAGE>

The balance of retail notes held (principal plus accrued 
interest) with any installment 60 days or more past due was 
$46.1 million, $44.4 million and $54.3 million at July 31, 
1998, October 31, 1997 and July 31, 1997, respectively. The 
balance of retail notes held on which any installment is 60 
days or more past due as a percentage of ending retail notes 
receivable was 1.02 percent, 1.02 percent and 1.21 percent at 
July 31, 1998, October 31, 1997 and July 31, 1997, 
respectively.

During the third quarter and the first nine months of 1998, 
write-offs (net of recoveries) of Receivables and Leases 
totaled $4.5 million and $23.3 million, respectively, compared 
with $6.2 million and $20.6 million in the same periods last 
year. Annualized write-offs, as a percentage of the total 
average portfolio outstanding, were .26 percent for the third 
quarter of 1998 and .46 percent for the first nine months of 
1998, compared with .39 percent and .46 percent, respectively, 
during the same periods last year. Write-offs relating to  
retail notes increased 14 percent, or $1.4 million, in the 
first nine months of 1998, when compared with the first nine 
months of 1997, primarily due to increased write-offs of 
agricultural and construction equipment retail notes. Lease 
write-offs for the first nine months of 1998 increased 138 
percent, or $1.4 million when compared to the first nine months 
of 1997. These increases were primarily due to the significant 
increases in the lease portfolios financed. Annualized lease 
write-offs, as a percentage of the total average lease 
portfolio outstanding, were .38 percent for the first nine 
months of 1998, compared to .25 percent during the same period 
last year. Revolving charge and wholesale account write-offs in 
1998 remained relatively stable when compared to last year. 

Deposits withheld from dealers and merchants, representing 
mainly the aggregate dealer retail note and lease withholding 
accounts from individual John Deere dealers to which losses 
from retail notes and leases originating from the respective 
dealers can be charged, amounted to $151.0 million at July 31, 
1998, compared with $144.2 million at October 31, 1997 and 
$134.0 million at July 31, 1997. The Company's allowance for 
credit losses on all Receivables and Leases financed totaled 
$86.1 million at July 31, 1998, $85.9 million at October 31, 
1997 and $89.3 million at July 31, 1997. Allowance for credit 
losses represented 1.22 percent of the balance of Receivables 
and Leases financed at July 31, 1998, 1.36 percent at October 
31, 1997, and 1.42 percent at July 31, 1997. The Company's 
allowance for credit losses, as a percentage of total 
Receivables and Leases, has declined during the last twelve 
months due to an ongoing reevaluation of loss experience and 
related adjustments to ensure that the allowance for credit 
losses is maintained at an adequate level. Management believes 
the allowance for credit losses at July 31, 1998 is sufficient 
to provide adequate protection against losses. 

Year 2000

The Company's Year 2000 Program addresses major assessment 
areas that include information systems, mainframe computers, 
personal computers, the distributed network, facilities, and 
the readiness of the Company's suppliers and distribution 
network. The program includes the following phases:  
identification and assessment, business criticality analysis, 
project work prioritization, compliance plan development, 
remediation and testing, production implementation, and 
contingency plan development for mission critical systems.  

The Company's objective is to become Year 2000 compliant with 
its mission critical activities and systems, including a 
contingency plan, by early 1999, allowing substantial time for 
further testing, verification and the final conversion of less 
important systems. The Company continues to be on schedule in 
its plans to accomplish this objective and has initiated 
infrastructure and information systems modifications to ensure 
that both hardware and software systems are compliant. The 
Company also is requesting assurances from its significant 
suppliers and dealers that they are addressing this issue to 
ensure there will be no major disruptions. 

Page 9

<PAGE>

The total cost of the modifications and upgrades to date has 
not been material. Although no assurances can be given as to 
the Company's compliance, particularly as it relates to third-
parties, including governmental entities, based upon the 
progress to date, the Company does not expect that either 
future costs of modifications or the consequences of any 
unsuccessful modifications will have a material adverse effect 
on the Company's financial position or results of operations. 
Accordingly, the Company believes that the most reasonably 
likely worst case Year 2000 scenario would not have a material 
adverse effect on the Company's financial position or results 
of operations. However, the Company is developing contingency 
plans, which should be complete by early 1999, should any Year 
2000 failures occur in any of the assessment areas noted above.  

Capital Resources and Liquidity

The Company relies on its ability to raise substantial amounts 
of funds to finance its Receivable and Lease portfolios. The 
Company's primary sources of funds for this purpose are a 
combination of borrowings and equity capital. Additionally, the 
Company periodically sells substantial amounts of retail notes 
in the public market and in private sales. The Company's 
ability to obtain funds is affected by its debt ratings, which 
are closely related to the outlook for and the financial 
condition of Deere & Company, and the nature and availability 
of support facilities, such as its lines of credit. For 
information regarding Deere & Company and its business, see 
Exhibit 99. 

The Company's ability to meet its debt obligations is supported 
in a number of ways as described below. All commercial paper 
issued is backed by bank credit lines. The assets of the 
Company are self-liquidating in nature. A strong equity 
position is available to absorb unusual losses on these assets. 
Liquidity is also provided by the Company's ability to sell and 
securitize these assets. Asset-liability risk is also actively 
managed to minimize exposure to interest rate fluctuations.

Total interest-bearing indebtedness amounted to $6.054 billion 
at July 31, 1998, compared with $5.470 billion at October 31, 
1997 and $5.481 billion at July 31, 1997, generally 
corresponding with the level of Receivables and Leases 
financed. Total short-term indebtedness amounted to $4.624 
billion at July 31, 1998, compared with $3.387 billion at 
October 31, 1997 and $3.127 billion at July 31, 1997. Total 
long-term indebtedness amounted to $1.790 billion, $2.083 
billion and $2.354 billion at July 31, 1998, October 31, 1997 
and July 31, 1997, respectively. The ratio of total interest-
bearing debt to stockholder's equity was 6.9 to 1, 6.7 to 1 and 
6.9 to 1 at July 31, 1998, October 31, 1997 and July 31, 1997, 
respectively. During the first nine months of 1998, the Capital 
Corporation issued $200 million of 5.85% notes due in 2001, and 
retired $150 million of floating rate notes due in 1998. 
Additionally, the Capital Corporation issued $796 million and 
retired $183 million of medium-term notes during the first nine 
months of 1998.

At July 31, 1998, the Capital Corporation, Deere & Company, 
John Deere Limited (Canada) and John Deere Credit Inc. 
(Canada), jointly, maintained $5.028 billion of unsecured lines 
of credit with various banks in North America and overseas, 
$728 million of which was unused. For the purpose of computing 
unused credit lines, total short-term borrowings, excluding the 
current portion of long-term borrowings, of the Capital 
Corporation, Deere & Company, John Deere Limited (Canada) and 
John Deere Credit Inc. (Canada), were considered to constitute 
utilization. Included in the total credit lines is a long-term 
credit agreement commitment for $3.500 billion expiring on 
February 24, 2003. An annual facility fee on the credit 
agreement is charged to the Capital Corporation based on 
utilization.

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<PAGE>

The Company's business is somewhat seasonal, with overall 
acquisitions of Receivables and Leases traditionally higher in 
the second half of the fiscal year than in the first half, and 
overall collections of Receivables and Leases traditionally 
somewhat higher in the first half of the fiscal year.

During the first nine months of 1998, the aggregate net cash 
provided by operating and financing activities was primarily 
used to increase Receivables and Leases. Net cash provided by 
operating activities was $257 million in the first nine months 
of 1998. Financing activities provided $550 million during the 
same period, resulting from a $588 million net increase in 
total borrowings, which was partially offset by $38 million in 
dividend payments to John Deere Credit Company. Net cash used 
for investing activities totaled $835 million in the first nine 
months of 1998, primarily due to Receivable and Lease 
acquisitions exceeding collections by $1.682 billion, partially 
offset by the $805 million in proceeds from the sale of 
receivables. Cash and cash equivalents decreased $29 million 
during the first nine months of 1998. 

During the first nine months of 1997, the aggregate net cash 
provided by operating and financing activities was primarily 
used to increase Receivables and Leases. Net cash provided by 
operating activities was $198 million in the first nine months 
of 1997. Financing activities provided $530 million during the 
same period, resulting from a $590 million net increase in 
total borrowings, which was partially offset by $60 million in 
dividend payments to John Deere Credit Company. Net cash used 
for investing activities totaled $712 million in 1997, 
primarily due to Receivable and Lease acquisitions exceeding 
collections by $1.172 billion, partially offset by the $433 
million in proceeds from the sale of receivables. Cash and cash 
equivalents increased $16 million during the first nine months 
of 1997. 

The Capital Corporation paid a cash dividend to John Deere 
Credit Company of $12.5 million in each of the first three 
quarters of 1998. John Deere Credit Company paid comparable 
dividends to Deere & Company. On August 28, 1998, the Capital 
Corporation declared a cash dividend of $12.5 million to John 
Deere Credit Company, which in turn declared a cash dividend of 
$12.5 million to Deere & Company, each payable on September 8, 
1998.

Item 3.  Quantitative and Qualitative Disclosures About Market
         Risk.

See the information under "Management's Discussion and 
Analysis," Note 12 "Financial Instruments" and "Supplemental 
Information (Unaudited)" in the Company's most recent annual 
report filed on Form 10-K. There has been no material change in 
this information.


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<PAGE>


                  PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings.

The Company is subject to various unresolved legal actions 
which arise in the normal course of its business, the most 
prevalent of which relate to state and federal laws and 
regulations concerning retail credit. Although it is not 
possible to predict with certainty the outcome of these 
unresolved legal actions or the range of possible loss, the 
Company believes these unresolved legal actions will not have a 
material effect on its financial position or results of 
operations.

Item 2.  Changes in Securities and Use of Proceeds.

On July 17, 1998, the Company announced that it would redeem on 
August 17, 1998 (the "Redemption Date") all of its outstanding 
6.74% Medium-Term Notes, Series C due August 15, 2000 (the 
"Notes") at a redemption price equal to the principal amount of 
the Notes. Payment will be made upon presentation and surrender 
of the Notes: if by hand, at The Chase Manhattan Bank, 
Corporate Trust-Securities Window, 55 Water Street, Room 234, 
North Building, New York, New York 10041, or if by mail, to The 
Chase Manhattan Bank, c/o Texas Commerce Bank, Corporate Trust 
Services, P. O. Box 219052, Dallas, Texas 75221-9052.

Item 3.  Defaults Upon Senior Securities.

Omitted pursuant to instruction H(2).

Item 4.  Submission of Matters to a Vote of Security Holders.

Omitted pursuant to instruction H(2).

Item 5.  Other Information.

None.

Item 6.  Exhibits and Reports on Form 8-K.

(a)  Exhibits.

     See the index to exhibits immediately preceding the
     exhibits filed with this report.

     Certain instruments relating to long-term debt,
     constituting less than 10% of the registrant's total 
     assets, are not filed as exhibits herewith pursuant to 
     Item 601(b)(4)(iii)(A) of Regulation S-K. The registrant 
     will file copies of such instruments upon request of the 
     Commission.

(b)  Reports on Form 8-K.

     Current reports on Form 8-K dated May 19, 1998 (items 5 
     and 7) and July 17, 1998 (Item 5).

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<PAGE>



                         SIGNATURES



Pursuant to the requirements of the Securities Exchange Act of 
1934, the registrant has duly caused this report to be signed 
on its behalf by the undersigned thereunto duly authorized.




                            JOHN DEERE CAPITAL CORPORATION


Date: September 2, 1998     


                            By:  /s/ Nathan J. Jones
                                 --------------------------
                                 Nathan J. Jones
                                 Senior Vice President 
                                 (Principal Financial Officer)










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<PAGE>



                        INDEX TO EXHIBITS



Exhibit
-------

(12)  Computation of ratio of earnings to fixed charges    

(27)  Financial data schedule                              

(99)  Part I of Deere & Company Form 10-Q for the quarter ended
      July 31, 1998 (Securities and Exchange Commission file
      number 1-4121*).










------------------------------
*    Incorporated by reference. Copies of these exhibits are
     available from the Company upon request.

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