Home / Markets / Markets Analysis / Large crops equal calm markets

Large crops equal calm markets

Agriculture.com Staff 08/20/2009 @ 4:14pm

The August crop reports gave market participants a lot of information to digest and the market seems to be more calm as the crop sizes were adequate or large. So, right now the markets have less anxiety to handle and have been stuck in a fairly narrow range. Of course, current weather forecasts and the recent rainfall mean more comfort with substantial crop sizes, too.

The market is being fed with crop size information this week by the crop tour currently winding through the Midwest. The market has been paying attention as tour participants seem to reinforce the idea of a record corn yield. The soybean yield seems more up in the air. A lot of this is due to the fact that soybean yields are determined later in the growing season (versus corn) and also, this year, due to the lateness of the crop.

Do not forget areas outside of the Corn Belt when pondering crop size. The Delta corn harvest has begun and apparently, yields are very good. This crop is typically not stored, but rather moves quickly to the Gulf to satisfy export demand. The same is true of the soybean crop, although harvest for it will be much more spread out in terms of time. This season of mild temperatures and adequate rainfall has been very kind to crops in the south.

About all that's left to discuss is the possibility of a frost or freeze damaging the crops. So far, forecasts for September seem very normal for both temperature and precipitation. But it will be forecasts for right around October 1st which will be more interesting. First frost dates for the eastern Corn Belt begin around October 1st and continue through the month of October. Last year, just for comparison, 50 percent of the corn crop in Iowa (late planted and rain soaked early in the season) was mature by September 12th.

The risk of loss in trading commodities can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.

The August crop reports gave market participants a lot of information to digest and the market seems to be more calm as the crop sizes were adequate or large. So, right now the markets have less anxiety to handle and have been stuck in a fairly narrow range. Of course, current weather forecasts and the recent rainfall mean more comfort with substantial crop sizes, too.

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.
Cool Tools Christmas Edition: Part 2