Hellish crop weather slamming Corn Belt
Crop conditions in many key areas may be going from bad to worse in the next few days.
Temperatures will scrape the triple-digits around the nation's center to begin this week. With the exception of a quick pass-through by a "weak cool front" bringing some spotty showers later in the week, the weather will remain hot and dry for the next week and a half or so, forecasters say.
That forecast is a recipe for disaster for much of the region's corn and soybean crops that need heat, but not "at the expense of yield," and that's now got the grain markets soaring.
"The real story is just the heat here," says Don Roose, analyst and broker with U.S. Commodities in West Des Moines, Iowa.
That risk premium is massive Monday morning; in morning electronic trading ahead of the open-outcry session, November soybeans were 60 3/4 cents higher at $13.88 3/4, while December corn was 20 cents higher at $4.90.
The next 7- to 10-days' weather is driving those prices; record-high temperatures are expected from northern Missouri and central Illinois to south-central Minnesota, says Harvey Freese, senior ag meteorologist with Freese-Notis Weather, Inc.
"Sunny, hot weather with near-record highs are forecast early this week across the western and central Corn Belt states. Highs will be in the 90s with the possibility of a few record highs in the lower 100s tomorrow," Freese says Monday morning. "The hot temperatures will speed the crops toward maturity, but the heat and dryness will stress crops in the grain filling stage."
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Roose says much of the bullishness will focus on the soybean trade, as recent crop estimates reveal two major questions about that crop's condition. "Pod counts are under earlier estimates. Are the acres really out there? It's stealing yield potential more so on soybeans than on corn and adding a risk premium to the market," he says, adding central Iowa could wrap up the month of August with around 1 inch of rainfall, the lowest total since the 1980s.
Looking beyond the next few days, there's hope of a brief respite from the heat and dryness late this week. But it's going to crank back up -- maybe even hotter and drier -- next week, according to Commodity Weather Group (CWG).
"The hottest temperatures occur over the next week, peaking in the upper 90s to low 100s for the driest western areas and then moderating into the mid-80s to mid-90s for the balance of next week," according to CWG Monday morning. "There is currently at least 40% of the Midwest that is most severely dry and will be suffering yield loss (mainly to soybeans) with the warm pattern, and the best-case scenario would narrow this area down to about one-third of the Belt after next week’s showers."