It makes me wonder
Most of the marketing talk this week has been conjecture on how big the soybean and corn crops are. Many are eagerly anticipating the results of the Pro Farmer tour. Reports I got from the Nebraska part of that tour indicate that the crop was hurt worse than most people think by the hot dry weather this summer.
Considering my observations and the weather conditions so far during the growing season, I wonder what is really out there. No doubt the heat and dryness this summer took a lot of bushels off the non irrigated corn. As I toured a big part of the eastern part of the state last week for Soybean Management Field Days, most of the pivot corners were a total loss. Some dryland corn in far eastern counties didnâ€™t look too bad.
I walked through one of my corn fields yesterday. I took the top of a terrace so I would see the worst conditions in the field. Every stalk had an ear and most were filled well except for the very tip. No doubt the seven inches of rain we have had so far this month will add to kernel depth and high test weight. Not all of my neighbors are so fortunate. Planting date and tillage made a big difference on the ability of the corn plant to survive the terrible conditions in June and July. Some fields have had big brown patches for more than a month. There canâ€™t be much corn in those areas.
The rain that started August 1 should have been ideal for the soybeans. For some reason I donâ€™t understand, the beans got very tall even with the drought stress. They were just starting to fill when the rains came. My experience from growing soybeans for 35 years tells me that we should have the best yields ever. However, that experience also tells me that guessing soybeans yields frequently results in disappointment when the weights are in and bushels are calculated.
I have learned to take yield estimates at this time of year with a grain of salt. It is better to judge the psychology of the market and make decisions accordingly. The last two weeks of August and first week of September frequently see small rallies in the grain markets. The odds are better for soybeans than for corn. With this yearâ€™s weather, the opposite may be true. The rain was too late to make a record breaking corn crop. However, the effect on soybean yields should be dramatic.
Price action this week indicates that the anticipated rally may have started. I was frankly surprised by the rebound in corn futures. Basis has improved a little as well, but it is still disastrously low. The key thing to remember about rallies this time of year is that they typically end before the September crop report. That report frequently changes the attitude about the crop size from one of concern to confirmation of a big crop.
About eight years out of ten it is better to price soybeans a day or two before the September crop report than it is to sell them at harvest. The odds are not quite as good for corn. However, completely different fundamentals this year may make that rule work as well in the corn market. What happens to prices the next two weeks will be the key.