The little bit of rain we got out of a long, noisy thunderstorm last night (Monday) was very welcome.
Dry weather has crept up on me. It was encouraging, after the wet spring and early summer, to see hay getting baled without being rained on and wheat straw being baled while it was still bright. It was a little worrying to see soybean fields that did not seem to be gaining height.
We had gone 10 days without rain now, and it felt good for a while, but now the corn is silking and we need rain.
I should have known we were getting dry. I had to bury a pet in the backyard cemetery this week, and I worked to chip out a hole. The lawn is getting brown is places, and just got mowed after two weeks. I realize I now have a new gauge for needed rain.
Squeeze decided she likes the natural look of a country drive with two wheel tracks and grass in the middle. When the grass in the middle gets brown, we need rain!
Turnaround Tuesday
Tougher weather must be the normal thing over the Midwest, because the market is higher this morning on what may be another “Turnaround Tuesday.”
The big factor is the USDA Crop Condition Report out Monday afternoon. The corn crop is now estimated to be 72 percent good and excellent. That is a loss of 3 percent in a week, and more than expected. We have gone from the highest ratings in history to being just 2 percent above average.
Similarly, the soybean ratings have declined 2 percent, to the same 72 percent rated good and excellent. This, however, was expected.
The crops are ahead of normal in development, however, well on the way to an early harvest. Sixty-three percent of the corn crop is silking, although around here, we are just getting started. That is the second-highest rating of the last 18 years, so it makes up some in traders’ minds for the slipping conditions.
The silking and pollination period is often the most critical for determining final yield. The corn crop needs an inch a week of rain for good development. During pollination, it needs two inches of rain a week. Poor weather at this time can result in a “pollination scare,” which bounces prices higher.
It never fails to amaze me how a seed of pollen gets all the way down each silk tube to fertilize each kernel on the cob. This must be accomplished without heavy rains that wash pollen away or without burning temperatures that dry up the silks.
So far, we have seen no hot and dry forecast to indicate that we should be concerned about pollination this year.
Soybean usage
Soybean usage paints a good picture for beans right now. Once again, this June, we set a new all-time record for crush. This is the eighth straight record in a row!
Sadly, part of this is driven by the low prices for beans, but the result is a crop that is being used up, helping the ability to rally if conditions are right.
Futures
December corn futures are up over 4 cents this Tuesday morning, fueled by the Condition Report. We are trading 3.59 1/2, which is still below the old low of 3.60. This week we made a new low at 3.50 1/4.
November soybeans are trading 8.51 1/2, up almost 6 cents. The new low was made here at 8.26 1/4 on July 16, yesterday.
September wheat futures have bounced off the low. That was made on July 11 at 4.71 1/4. This morning we are at 4.96 1/2, up 8 cents.
Corn exports have been a bright spot in a market determined to follow the politicized soybeans lower. Exports this week came in a 1.271 mmt., which was near the guess. We continue to gain on the USDA export goal by 15 or 20 mmt. per week. Cheap corn helps exports. Exports help us use up the oppressive corn supply from two good crops, about to be followed by a third.
So, weather, weather, weather. Hope for good weather. You need a big crop more than anything else right now. Worry about pricing it after it is binned, if there is no late summer opportunity.
(Comments are welcome at 440-363-1803.)
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