Home / Markets / Markets Analysis / Just what we needed

Just what we needed

Agriculture.com Staff 07/11/2008 @ 1:24pm

The weather today at my farm is typical for a July day in eastern Nebraska. The temperature is around 90 degrees and rising. The humidity takes your breath away. The forecast is for the top to be around 94 degrees this afternoon. I promised to mow the yard this afternoon. Right now spending time at the computer in my air-conditioned office seems like a better idea.

I know that some areas are already getting dry after some torrential June rains. I know that other places are still hoping to dry out. At my place, this weather is just what we need for perfect crop development. We had an inch and a quarter of rain on Monday and Tuesday. I would like to say it was nice gentle precipitation, but unfortunately the rain Tuesday came as hard as I have ever seen. I am glad it did not last very long.

The change in appearance of the crops amazes me. In a week's time corn which was yellow from too much water has turned a dark green as the roots reached deep nitrogen. Soybeans that were planted earliest and in 15 inch rows now shade the space between rows. Traders in Chicago who drove into the countryside over the July 4 weekend obviously saw the improvement in conditions when they returned to the trading floor on Monday.

As I mentioned last week, it is common to see a change in trend following the Independence Day holiday. That certainly happened this year in the corn market. It makes the sale of cash corn I did on June 27 look very good. What a relief to have the bins empty and not be faced with cleaning them out during this heat and humidity.

Looking at the government reports from last week and this week, it seems as if price action is not following logical path. One of the sayings on my Murphy's Laws poster says. "The market is not logical, it is psychological." I should quit trying to calculate the fundamental factors and just go with the trend. Long term seasonal charts show a down trend in the corn market from late June through the end of September. I doubt that prices this year can go down that long without at least one rebound. However, with prices where they are and the appearance of the crop continuing to improve, odds are good prices will be lower at harvest than now.

Soybeans this week have taken a different direction. Carry over is certainly low enough to justify price strength. However, with futures over $15, some weakness before harvest is easy to rationalize. Long term charts show prices trending down now, but recovering in August and early September. We need to keep in mind the possibility of Asian Rust developing with this humid weather. If that happens, all bets are off. Meanwhile enjoy the contra seasonal price strength and hope that if the rust comes it will be too late to damage yields.

The weather today at my farm is typical for a July day in eastern Nebraska. The temperature is around 90 degrees and rising. The humidity takes your breath away. The forecast is for the top to be around 94 degrees this afternoon. I promised to mow the yard this afternoon. Right now spending time at the computer in my air-conditioned office seems like a better idea.

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.
Confluence Project: Bioreactors