Into the fray!
The whole issue is that nobody knows. Ray looks out his window and sees ideal conditions. I look out my window and see good crops, but conditions that are far from ideal for finishing the maturing process. Corn fields have yellow spots where the excess water did not drain away. Soybean fields need relief from the dryness that has been going on for most of July and August.
My mind keeps going back to the fields I saw in northeast Iowa in late June that were still under water. Maybe that area was small and the condition localized. If so, it will probably not affect the nationwide crop much. That is some of the best ground in the world. Yields will be disappointing.
The long terms seasonal charts that I recently updated show a strong tendency for prices to rally going into the September crop report. We have had the rally. Whether it will last another two weeks is the issue. Some analysts think it will not. Even if it does not, $5 corn and $12 soybeans are good prices.
There is an even stronger tendency for soybean prices to drop between the day of the September crop report and October 3. Regardless of what Ray or his detractors think, harvest will start around October 1 and there will be new crop beans to sell. At some point that will put pressure on prices. It may be sooner. It may be later.
One of the principles I observe at this time of year is that "on average things are average." I have been through this dry weather ringer in eastern Nebraska enough times that I anticipate average production. If conditions were ideal every year we would raise 57-bushel soybeans as we did in 1994. Every year, we would raise 178-bushel corn as we did in 2004.
Those perfect conditions are not happening this year. We adjust marketing plans accordingly. We have grain bins to help us with the unknowns.
I will be in Des Moines next week for the Marketing Talk get-together. You will have the opportunity to take your shots at me on Wednesday. We still will not know what yields are or what the crop report says. We will have a good idea of what the grain trade thinks because we will be three trading days closer to harvest.
Have a happy Labor Day weekend!
I cannot resist jumping into the discussion generated by Ray Grabanski's comments on crop yields. This is a typical scenario for the August/early September time period. Early summer was too wet. We all knew that. Then the weather turned off dry. That was just what the crops needed. When the rain quit, it really quit! Then it was too dry. That started the price rebound that has continued until this week.