Home / Markets / Markets Analysis / Crop weather has the attention of CBOT markets, analysts say

Crop weather has the attention of CBOT markets, analysts say

Agriculture.com Staff 06/13/2006 @ 6:55am

Though subsoil moisture seems adequate across the Midwest, short topsoil levels carry nervousness for the corn and soybean markets, analysts told Agriculture Online on Tuesday.

After a rainy forecast lowered corn prices 6% last week, the market went higher Monday because only the eastern Corn Belt received moisture.

Major corn and soybean growing areas such as central Illinois and large parts of Iowa, Nebraska, the Dakota's, and Minnesota are still in need of moisture.

Most 6-10 day weather forecasts call for above normal temperatures/dry weather.

With continued dryness, the CBOT December 2006 futures corn contract could jump $0.25, or widespread rain, if realized, could drop the market the same, market watchers said.

Jason Ward, North Star Commodity Investment Company, said until rain falls the weather is topic-one with traders.

"I think it's realistic to look at a $2.75 bushels per acre corn market that has $3.00 potential with no rain," Ward said. "You have to have constant heat coming at this crop or we will see setbacks on the market."

Mark Gold, E Hedger managing director, said it's that time of the year when the weather situation is watched every day.

"Hot/dry forecasts are always bullish, the only real problems are eastern Nebraska, and western Iowa. Monday trading for the next eight weeks won't be normal with markets reacting to weekend weather," Gold said.

With a widespread rain event, Gold sees the corn market giving back the $0.05 per bushel, and $0.06 on the soybeans gained on Monday.

Meanwhile, talk of hurricane activity in the Florida Gulf Coast, could mean further bullishness for the corn market.

"I think the market is certainly going to pay attention to this hurricane. It will probably draw up some moisture from the Gulf, whether it gets far enough north and west to make a difference is anybody's guess," Gold said.

Meanwhile, Elwynn Taylor, Iowa State University Extension Climatologist, said last week the Corn Belt is due for a serious drought, according to an 18-year weather pattern. Plus, the fact that the Southeast is dry is a major concern.

"We're going to be very surprised if we don't have a serious drought in the next few years," Taylor said.

Taylor added, "We anticipate a below trendline yield for this year's crop," Taylor said.

At last week's World Pork Expo, Taylor estimated a below trendline corn yield. For Iowa, Taylor estimated corn yields between 138-143 bushels per acre, and 39 bushels per acre for soybeans.

Though subsoil moisture seems adequate across the Midwest, short topsoil levels carry nervousness for the corn and soybean markets, analysts told Agriculture Online on Tuesday.

CancelPost Comment
MORE FROM AGRICULTURE.COM STAFF more +

Farm and ranch risk management resources By: 07/07/2010 @ 9:10am Government resources USDA Risk Management Agency Download free insurance program and…

Major types of crop insurance policies By: 07/07/2010 @ 9:10am Crop insurance for major field crops comes in two types: yield-based coverage that pays an…

Marketing 101 - Are options the right tool… By: 07/07/2010 @ 9:10am "If you are looking for a low risk way to protect yourself against prices moving either higher or…

MEDIA CENTERmore +
This container should display a .swf file. If not, you may need to upgrade your Flash player.
Looking Out for Soybean Cyst Nematodes