Iowa Farmer Today
07-15-06
Weather to heat up prices
By Gene Lucht, Iowa Farmer Today
It’s all about tassels and rain right now.
For the next week or two, the only thing that really matters in the corn market is
the weather, just as is the case every July as the crop hits pollination.
Since July tends to be hot and dry in Iowa, that often means market
opportunities.
Rain across Central Iowa Monday was a welcome sight for many Iowa farmers
and might have put a small damper on any potential rallies.
But, the western Cornbelt has been dry this summer, and forecasts called for
plenty of hot, dry weather later in the week.
That could push prices higher again, according to Robert Wisner, Iowa State
University economist.
“That prospect would add modest strength to the corn prices during the next two
weeks,” he says.
“We’re right at the critical period for the crop.”
With December corn futures at $2.72 Monday, Wisner says there are thresholds
at about $2.78 and $2.87¼ the market could attempt to reach.
Recent USDA reports still estimate the average U.S. corn yield at 145 bushels
per acre.
If the final figure is there or slightly below that number, it could mean the market
will burn off some its large carryover.
Wisner says it could mean a drop in corn supplies of 1.1 billion to 1.2 billion bu.
over the next year, which would put the carryover next year at about normal
totals.
With those numbers in mind, he says farmers in areas where there has been
enough moisture or in areas where they are using irrigation may want to sell
some old- or new-crop corn this month to take advantage of the market.
Monday’s weekly USDA crop condition update indicated some deterioration in
the crop with 63 percent listed as good or excellent nationally (68 percent in
Iowa).
Those numbers were lower than the previous week when the national number
had been 68 percent and Iowa was at 77 percent.
Wisner says the soybean market doesn’t face the same seasonal pressures as
the corn market.
But, bean conditions were down last week with only 58 percent registering as
good or excellent, compared to 64 percent the previous week.
One possible reassuring item in the bean market is the recent dry weather could
mean a reduced risk of Asian rust.