Corn turns bearish as rain revives U.S. crops

Wet Weather

With most of the Midwest harvest still three months away, yields can still be eroded by extreme weather. Last year’s drought, the worst since the 1930s, cut U.S. production by 13% and drove prices to a record $8.49 on Aug. 10.

Crop planting accelerated in the past month as fields dried out after unusually wet weather earlier in the season that curbed sowing to the slowest pace since 1980, USDA data show. Rainfall in parts of Illinois, Iowa, Nebraska, Kansas, Missouri and South Dakota was less than 50% of normal in the 30 days ended July 9, National Weather Service data show.

“We continue to watch dryness and building heat in the western Corn Belt, which could pressure yields,” said Bennett Meier, an analyst at Morgan Stanley in New York. Most of the crop was seeded two weeks later than normal, so plants will pollinate during the hottest, driest part of the year, he said.

Early Frost

There’s also an increased risk that corn won’t mature before freezing weather arrives, usually beginning by late September to mid-October, said Fred Gesser, the senior agricultural meteorologist for Planalytics Inc. in Berwyn, Pennsylvania. The chance of an early Midwest cold spell increased after volcanic eruptions in Russia and Alaska during the past month sent gases and ash into the atmosphere, he said.

“We’re behind normal, so right now I would say my main concern would be an early frost,” said Dave Pollock, the manager of Wiota Elevator Inc., which operates grain terminals in Wiota and Anita, Iowa.

Crop conditions improved in each of the past four weeks, with 68% rated good or excellent by July 5, USDA data show. That’s above the five-year average of 63%. A year earlier, the rating was 40% and by September had dropped to 25%.

Fields in Iowa were soaked by 17.67 inches of rain from March 1 to May 31, the wettest in records going back to 1873, according to the state climatologist. That improved conditions for the 97.4 million acres the USDA estimates was planted with corn this year.

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