Weather worries tend to peak as the corn crop goes through the pollination period. This is simply because the corn plant needs 2 inches of rain and moderate temperatures the week of pollination. Thus, prices have been erratic with each weather report recently.
Last week, the talk was about the dry weather in the West, even though we had flooding in Illinois and most of the East had been too wet since the crop started. We were also seeing temperature forecasts as high as 110 degrees in some areas.
Now we have seen general heavy rains over most of corn country, with moderating temperatures. We are only going to be 72 degrees at my house July 25.
There has been a collective sigh of relief in the dry areas and a lot of “why me” complaints in the wet areas. With even the late plated areas of northeast Ohio starting to silk this week, we have run out of pollination worries. This means we have run out of reasons for a big rally in corn for the year.
This week the support for corn prices is not weather worries, but the reality that the weather so far has produced a crop that is still declining in condition. USDA reported Crop Condition July 24 at 62 percent good and excellent for corn, down 2 percent from last year and 14 percent less than last year at this time.
The good news is that Ohio’s rating improved 2 percent this week, to 56 percent good and excellent. The improvement in corn condition is visible to road-side surveys. The corn has greened up, has grown another foot quickly, and is silking even in the northern regions.
Walk into the fields and you are disappointed. The stands are spotty, and the height is up and down with the drainage. You can map the tile lines very easily this year, in corn and beans. The official soybean ratings are a similar disappointment.
The US is rated 57 percent good and excellent, and that is a 4 percent drop from last week. Rarely do you see that size of drop across the whole country. We are now 14 percent less than last year’s rating in soybeans, also. The Ohio crop is rated at only 47 percent good and excellent.
The poor soybeans crops are also obvious to the naked eye. The only good beans I see around here are on gravel, and most of the farms have no gravel. The rest are spotty, yellowed, and short.
Of course, with beans we can be surprised with the yield if we have good conditions the last half of July and in August. Prices have been, as we discussed last week, erratic with the daily weather and the impressions of weather to come.
What they have never been is high. We make an encouraging move, then break prices off again. Corn and soybean charts are similar. November soybeans rallied $1.30 between the end of June and early July. By July 11 we had them at $10.47, but they broke 63 cents in three days, to $9.84.
A six-day rebound got them back to $10.31 1/4 on July 20, but July 24 we saw $9.98 1/4 briefly. We are currently trading, July 25, at 10.17 1/2, up over seven cents. That higher price would reflect the condition decline, I believe.
Meanwhile, the corn is currently off nearly three cents, at $3.88 December futures. The corn rally the same days as the beans added 43 3/4 cents to the price, topping out at $4.17 1/4 July 11. In two days we were back to $3.81 3/4, then back up to $4.06 3/4 in a week. It is my impression that small lots of new beans have been priced on the rally, but very little old or new corn has.
The prices still seem cheap to farmers. The rallies have been short, and have not touched targets for most producers. It is hard to sell corn below $4, and there has been no opportunity so far.