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Now the weather market begins

Agriculture.com Staff 06/16/2006 @ 11:14am

Over the last decade, advances in farming practices have helped U.S. farmers plant crops in a relatively short window of time. In other words, the planting delay concerns that existed ten years ago and beyond have little relevance today.

We do not want to imply that planting delays do not occur (they do), and this year is no exception, but as a whole, the crop gets in the ground. Therefore, with the mindset that the crop will be planted in a relatively timely fashion, the question then is, when does a weather market that really affects crop production come into play?

Our belief is the weather market begins about June 15. After the crop is planted, it begins to grow. By late May/early June, as long as it gets some rain and temperatures warm up, corn and soybeans pop out of the ground and look green. Therefore, the ratings are high, and weather has had little impact. Unless it is brutally wet or critically dry during the month of May, the majority of the crop will look good by the first or second week of June.

After June 15, weather has a big impact, especially rainfall amounts. One good rain could be worth one to three billion bushels of corn production. As temperatures heat up after mid June, the majority of the crop is in peril if adequate rain fails to materialize, or if temperatures move above normal for an extended period of time.

A projected drawdown in corn carryout next year to under 1.1 billion bushels, about half of this year's carryout, implies it is critical that the 2006 corn crop be average or better. Any threat from weather beyond mid June will likely have the market quickly rallying, reflecting end user and speculator concerns that prices may ultimately double in value.

In the end, Mother Nature is still the most dominant factor in crop production and likely will be for the foreseeable future. Be prepared; major price-moving weather is upon you.

If you have any questions, comments or want a strategy tailored to your farm operation, contact Top Farmer at 1-800-TOP-FARM, ext. 129.

Over the last decade, advances in farming practices have helped U.S. farmers plant crops in a relatively short window of time. In other words, the planting delay concerns that existed ten years ago and beyond have little relevance today.

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