Grains slump on weather . . . for how long?
After a mixed overnight trading session, corn, soybean, and wheat futures have started this week lower on favorable crop weather and bearish pressure from outside and global markets, market-watchers say.
"Rains should remain very active across the central Plains and southern Midwest this week, and moisture supplies will continue to improve there as a result," says MDA Weather Services senior ag meteorologist Don Keeney. "Rains should remain most limited across eastern Iowa, northern Illinois, and southern Wisconsin, and some dryness and crop stress will continue there. In the Midwest will be in Missouri and southwestern Iowa. However, some spotty dryness will likely linger across southeastern Iowa and west-central Illinois."
The amount of rainfall that does move through the region will be followed up by a return to humid conditions that will favor the development of more storms later in the week, adds Freese-Notis Weather, Inc., senior meteorologist Harvey Freese.
"Increasing heat and humidity will set the stage for another round of showers and thunderstorms Tuesday night into Wednesday as a cold front approaches the area. Some strong storms with a period of heavy rainfall are possible during this period," Freese says. "Once the cold front pushes through on Wednesday, cooler and drier weather will return to the area for the latter half of the week."
This week's rainfall chances are more than welcome for many farmers who have watched a wet spring turn into a dry summer, likely forcing lower corn and soybean yield potential.
"Nothing great is going to be coming out of northern Iowa this year. I have a field or two that might have a chance at 200+ (bushels/acre) but just hoping to average 150," says Agriculture.com Marketing Talk frequent contributor north ia farmer. "Soybeans could be average or better if we could hook a rain or two in the next couple of weeks. We are getting on the dry side but looks like maybe this week we have a good chance of getting some."
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The improved rainfall chances were one of the primary drivers of lower grain prices moving into Monday's session, but it may not be long before current weather takes a backseat to the weather in a couple of months when frost starts to edge over the horizon. Some suspect the lower prices to start this week could be nearing their lows if the market starts to turn its attention to fall weather.
"If it weren't for outside markets, I can't help but wonder if we would put in at least a temporary low this week. I've been neutral to slightly bearish, but this cool weather trend is starting to get some legs under it. In my area, we have been getting plenty of sunshine and things are not that far behind. With current forecasts, however, it appears that things may start to lag even further behind," says Marketing Talk frequent contributor Illinois Steve. "In areas west and north that were late planted, it seems almost hopeless in the case of avoiding a damaging frost or freeze before maturity. I'm not sure the market will trade this until it were to happen, but you never know. There is a lot of potential out there despite all of the problem areas. But it all hinges on frost dates now."