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Weather to Tell Soybean Yield Potential
The market pretty much consolidated today as the trade continued to digest yesterday’s USDA bearish surprise. With crop ratings dropping two points in the good to excellent range over the past four weeks, it was a surprise to see the USDA raise the national yield 1.4 bu/acre.
Weather over the next four weeks will go a long way to determine if the USDA is correct with their yield estimate. The current weather pattern would suggest that the yield will shrink back as portions of the Midwest continue to miss out on rains, and there isn’t much on the way over the next ten days. With beans needing moisture to maximize blooming and pod fill in August, the lack of moisture should be construed bullish.
The eastern portion of the Belt continues to experience wet pockets of excessive rains, which is causing disease problems. For the week, the November contract lost 11 3/4 cents. Look for a choppy trade over the near term as the charts argue we should go lower but the dry weather pattern suggests the crop is getting smaller not bigger, which should be supportive.
Rich Nelson | Allendale Inc. | 815-578-6161
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