No Weather Rally Guarantee This Year -- Soy Roy
This has been a tough week in a lot of ways. Weather has been such that most of the crops got planted in a relatively orderly manner here in Cass County. The earliest planted corn was tall enough that it got nipped by frost on May 16. However, the damage was mostly cosmetic because the growing point of the corn was still below ground. After a few days, additional leaves appeared. Today that earliest crop is doing just fine. Sources tell me that soybeans are more susceptible than corn to early frost damage. From what I have observed, few of the soybeans were big enough to be damaged. Worries of crop loss from the early cold weather were mostly unfounded.
A big rainstorm on the evening of Mother’s Day was welcomed by farmers. It produced a lot of rain, but it also resulted in a lot of erosion damage. In my own case, I had only 30 acres of soybeans left to plant. I was happy to see the moisture to germinate the seed. However, the resulting runoff was severe enough to move the residue from the 2013 corn crop into terrace channels. The excess of cornstalks in certain areas made it difficult to see the marker marks. It also was difficult to get the beans covered with soil to promote germination. Now that planting is two weeks past, it is obvious that both corn and soybean stands are adequate for a good crop.
The big production problem this week now that the crops have emerged has been more rain. In my area the average precipitation amounted to around 2 inches from the latest storm on June 3. However, areas north of Omaha had more rain than in my area. They also had hail as large as softballs driven by winds clocked at 90 mph. The rain came in four different storms starting around 5 p.m. and ending somewhere before dawn the next morning. I am not exactly sure of the time because I finally went to sleep. I have never experienced a storm quite like that in all of my years of farming.
With all of the damage done by several storms, you would think it would cause the grain markets to rally. Unfortunately the old maxim “rain makes grain” governs the markets at times like these. My experience with grain markets when there is an excess of water is that prices respond to too much rain by going down. A quick study of the long-term price patterns shows a peak in soybean prices around June 20. For corn, a similar peak is one day earlier. As much as we dislike what the markets did this week, it should not be a surprise.
There is no guarantee that there will be a weather rally this year. One only has to look back a year to 2013 to see that big rainfall in the early growing season turned into extremely dry weather later in the summer. No doubt the heavy rain in the last month has given the crops a good send-off. Each farmer has to evaluate his or her own situation in terms of tolerance to any further cropping problems. Make marketing decisions accordingly. Even though prices have dropped from where they were a month ago, there is still room to go down.