My part of the world experienced four years of drought from 1974-1977. Each summer was hot and dry, but each summer rains fell late in the season which resurrected the soybean crop.
Those were tough years. I had only been farming a few years and had a young family to support. It was frustrating to hear of farmers in other parts of the country cashing in on record high prices while I was struggling to survive. If it were not for late rains that made for an average to good soybean crop, I might not be farming today.
Growing conditions this year are a lot like in those early years. With no-till and good genetics, our corn crop survived the early dryness and heat much better than back then. Some fields have big brown patches where farmers did a little too much tillage. Even some of the soybeans had wilted on tops of the terraces.
Last weekend the rains came. They started out small, but Tuesday morning we got the big one. When it quit, my rain gage showed over six inches. It came over a period of four days, so there was little runoff. My opinion was that it came in time to put additional pods on the soybeans and do a good job of filling the ones already there.
I am optimistic about the soybean crop. In 2002, big rains the second week of August produced 50 bushel beans after the plants had stopped growing. Surely the timing is better this year. One thing I have learned in 35 years of farming is that it is almost impossible to predict soybean yields until the combines roll.
Not everyone got as much rain as I did. A farmers two counties south of me reportedly had only a half inch. I feel for those in that area because it is frustrating when someone else gets rain and you do not. The rain in my area was followed by a big drop in soybean prices the next day.
Odds for soybean prices to trend higher through August are better than fifty percent. In many years the price will peak out a day or two before the September crop report. The probability of prices dropping after the report are almost eighty percent. With the rain we have had this week, it looks doubtful that beans can get the rally I hoped for to make more sales.
The situation is almost the opposite for corn. Rains this week will put test weight in the kernels, but there is no way it will bring back stalks that are already dead. Odds for a rally in August are poor. The seasonal chart is negative all the way through harvest. Reaction to todayâ€™s report was more negative than I had anticipated. I expected lower prices, but not this much lower. We probably have to get through harvest before anticipated good demand can overcome negative seasonal patterns.
The report was interpreted as positive for soybeans. Many years the soybean market makes an intermediate low around the middle of August. I hope this is one of those years. The negative psychology caused by action in the corn market overcame any potential positive response in soybean prices today. Maybe next week it will be different.