Crop stress mounts; will markets jump?
It's getting hot and dry in most of the Corn Belt. And, the bad news is the forecast looks hotter and drier.
Both the 6- to 10-day and 11- to 15-day outlooks show the heat and dryness is likely to ramp up in much of corn and soybean country. That's bad news for corn and soybean yield potential in a year when there are high expectations for a big-time crop.
"With dry weather expected in the Midwest during the 6-10 day period, dryness is likely to increase again, maintaining stress on corn and soybeans," says Don Keeney, senior meteorologist with MDA EarthSat Weather. "Warm temperatures are expected this weekend and again later next week and next weekend, with a brief cool down during the middle of next week."
That stress -- coming despite some scattered rainfall this weekend, "but not nearly enough to end the dryness that has developed," Keeney says -- is rapidly dragging down soil moisture levels. By Monday, Freese-Notis weather, Inc., data show much of the Corn Belt will have reached dryness levels previously more common in the mid-South.
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The rains that Keeney says will dot parts of the region will bring mild relief to some spots. But, the meteorologists at Commodity Weather Group (CWG) in Chicago agree that they won't amount to enough to solve the region's moisture problems.
"Showers are limited to the far northwestern Midwest today but do scatter eastward across the Corn Belt from Sunday into Tuesday.This will include the chance for some moisture in IA, MO, and KS, as well as a wetter trend in today’s forecast for much of the Delta into OH and eastern IN," according to CWG's Ag Quicksheet on Friday. This should focus the most notable dryness concerns on parts of northern and western IN, western MI, southern WI, IL, northeastern MO, eastern IA, and possibly southeastern NE, with the main yield threats in drier parts of MO and IL at this stage."
Specifically, Illinois looks to be the only Corn Belt state pegged to miss out on any weekend rainfall altogether; Both the 6- to 10-day and 11- to 15-day precipitation maps show below-normal rainfall chances for most of the Midwest, according to CWG.
Conditions like these have much of the region "looking like August," farmers say. Agriculture.com Marketing Talk senior contributor jec22 says he's had less than an inch of rain in about 5 weeks. And, while conditions like those are causing problems for the corn crop, the soybean crop is suffering more, says Marketing Talk senior contributor Blacksandfarmer.
"The biggest problem seems to be not enough moisture to germinate later-planted soybeans," he says. "The best beans around here were planted in the last week of April through the first week of May...Anything after that is very spotty. I see about 2 weeks left in this crop without moisture before we have a serious problem on a big scale."
What's this type of ominous outlook mean for prices? With prices trading "in the middle of the latest trading range" right now, Agriculture.com Market Analyst Roy Smith says the summer weather rally could get underway soon, especially considering how early the summer low was, late last week. If the uptrend in prices that the markets have shown the last 2 days continues on top of another 10 days to 2 weeks without rainfall, Smith says futures could be poised for a big jump.
"The average of the 30 year May soybean futures shows an early summer low on May 29, followed by a weather rally peak on June 21. The early summer low this year was right on schedule, coming on June 1. This was followed by a rally of 91 cents through today. The weather rally peak shows on the long term chart to be one week ahead of the government acreage report. If we get some rain and if crop conditions improve, the timing of the next market peak could very well be close to what the long term charts show," Smith says. "If there is no wide spread rain and hot weather continues, all bets are off. Any major weather problem will cause all rally calculations to go out the door. Weather rallies tend to end before the weather changes. This makes the timing of sale during this important period very difficult."