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Tim Hannagan: More rain coming

Spring has really sprung a leak. We're into an identical year, as two years ago, when La Niña brought excessive rains and a record late planting date for corn and beans. Last year was among the earliest planted dates on a dry spring. 

Inclement weather plays with pricing on the futures market. But, it's a long planting and growing season and we're going to have other issues on weather that will have even a greater affect on pricing, such as pollination for corn and pod-setting for beans, when yields are made or lost. 

Last year, everything went in the ground on time, but the rains came excessively late in corn's growing season and cut yields measurably. Two years ago, the heavy planting season rains led to a near perfect growing season and record crops. So, every year has its variances. 

Don't assume rains will last forever. At some point, the planting window will open and prices will fall. For next week, not the case. WX RIS, the weather site, sees a week similar-to-worse than this past week. 

WX RISK. com is forecasting three weather events. The first will hit Friday and Saturday. The second focuses on Sunday and Monday and the third next Thursday and Friday.  

The first system looks to bring up to 1.50 inches of rain, with 70% coverage, over the upper Plains' spring wheat and oat states and the Corn Belt. Also, that same system is seen dropping 4.00-plus inches over the lower Eastern states and southern Delta. Only 25% of the Southwest winter wheat belt will see any rain. 

The second weather system enters the western Corn Belt on Sunday and the entire Midwest Monday, with 75% coverage, up to 2.5 inches of rain, heaviest over Missouri, Illinois and Indiana. In addition, ample amounts over the Delta and upper Plains. 

The third weather system, next Thursday and Friday, isn't as wet but after the Sunday and Monday event, fields will be too soggy when system three enters. 

Some, but not all, weather models suggest a wet start the first week of May, as well. 

The long and short of this is fieldwork and planting is on hold thru the end of next week. Expect Monday's 3 pm Crop Progress Report to show corn, spring wheat and oat plantings well behind the five and ten-year averages with the following Monday report even further behind. This looks to give us a positive start to the futures next week as traders price in planting concerns. 

The real threat that late planting brings to corn is just fear, not fact. Late planting fear is if the growing season is shorter than yields are lower. The fact is, if crops planted late have near-perfect weather thru key yield development time, we will have normal to above-normal yields. And with bio-genetic seeds, you can plant on top of your head, wear a hat and still have a good crop. Well, not exactly. But futures trades fear before fact. 

The first weather guru to scream warmer, drier  weather lies ahead will break the market hard. It only takes one to scream 'fire' in a theater and everyone runs to the exit. Funds are fat and  on weather profits. 

There's a slight chance for Sunday and Monday's weather system to hit the winter wheat states of Kansas and Oklahoma. But, so far, Colorado and Texas look to remain in their drought. 

The rule of thumb for corn traders is 78% of the U.S. crop should be planted by May 15. But, if it's in by months-end it would be fine. The soybean market likes to see 90% of the crop seeded before June 10. 

The key to surviving trading weather markets is trailing 'stop loss' orders. Weather satellites release data on-and-off every 24 hours, seven days a week. Once the weather 'gods' get the updated imagery, they crunch the numbers in minutes and blast the results out on massive e-mail lists to traders. I have seen futures change direction three minutes after a weather report change occurs. 

Near to long-term play. Take profits on long corn, beans and wheat off Sunday, Monday highs that price in a wet week. Look for a profit-taking break off a drier-than-normal rain forecast, the first week of May, and buy wheat on the correction, as the winter wheat belt looks to remain dry into May. 

Technicals read like this. May corn support lies at $7.26, then the bottom of the chart at $6.94. Resistance is $7.68. December support is $6.54, then $6.24. May beans support is $13.40, then $13.15, with resistance at $13.80, then $14.10. May wheat support is still $7.25, and $8.00 resistance. A close over $8.00 leaves $8.35 next, then $8.80.


Tim Hannagan is a senior grain analyst with and a weekly contributor to

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