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Weather & markets: Will rain fuel bulls?

Jeff Caldwell 10/07/2013 @ 8:05am Multimedia Editor for Agriculture.com and Successful Farming magazine.

After a latter half of summer that saw some of the lowest rainfall totals in years in parts of the Corn Belt, Mother Nature's torment continues, only this time with the opposite extreme.

As much as 4 inches of rain fell over the weekend in parts of the Midwest, keeping farmers out of the combine until conditions dry out. Though the rain was badly needed in many spots, it's likely hit too late to make any difference to the crops, especially any soybeans that may have some development yet to go.

" . . . 99% of the beans in Ohio are ripe . . . the rain has only hindered and delayed harvest here," says Agriculture.com Marketing Talk adviser roarintiger1.

Though the crop may already be ready for the bin, this rain may not be the worst thing in the world, especially considering how dry it's been in some areas, like east-central Indiana, where Marketing Talk veteran adviser ECIN farms. Though he's seen more than 2 inches of rain in the last few days, the delay's not going to be long, and his crop probably won't suffer much.

"There was no bean cutting here last week -- rain then every day for a week -- then 2.5 inches of rain this weekend. But we were still pretty dry, and it will soak up pretty quick," ECIN says. "What it did do was raise the moisture in the beans from 9% to 18% to 20%. When guys fire up again this week, they will be cutting 13% to 14% beans -- or wetter. This will add weight over cutting 9% beans."



The weekend rain and the looming prospect of a continued slow harvest could mean higher grain prices in the near-term, some say. "Looks like it's going to get difficult to get this crop harvested. Looking for a slow grind higher," says Marketing Talk senior contributor 425Cat.

Considering current crop stocks flowing to the terminals and end-users, that may not be the case, others say. If the grain pipeline is flowing, a slower, rain-delayed harvest may not be much of a bull-driver for the markets, adds Marketing Talk veteran contributor BF2012.

"There is absolutely zero reason for any moves higher as long as the pipeline is flowing with new-crop and combines are rolling," he says. "The next couple weeks will see a steady decline in prices, and by the time anyone gets a handle on just how big this thing is . . . the market will be trading the next big monster 2014 crop."

In general, yields continue to surprise, especially for corn. About six weeks ago, hot, dry conditions were fueling lower expectations for crop yields, but that hasn't happened as expected. That could be enough to make a lower price trend continue through harvest, says Marketing Talk veteran contributor IllinoisSteve.

"Everyone is probably raising more than they thought they would even in the poor areas. Not sure where the floor is with this thing, but it might be ugly. Those who plan to store and wait out this market better take a refresher course on how to keep corn in condition for more than a year because it is going to be a long wait to get back to what some folks think they need to have for their corn," he says. "For the record, I don't want lower prices, but I'm forced to deal with the reality that it might happen."

 

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