DTN: Expect wetter-than-normal fall
BOONE – Farm Progress Show visitors to the DTN booth heard sobering messages.
Farmers were told to expect wetter-than-normal harvesting conditions, and that the next USDA supply and demand report, could break the corn market’s back.
Bryce Anderson, DTN senior agricultural meteorologist, and Darin Newsom, senior market analyst for DTN, presented their outlooks each day during the three-day show.
Anderson said his wetter-than-normal fall weather outlook is based on the lack of warm summer temperatures for most of the Midwest and a continuation of a set of weather features that were established in February 2013.
The large high pressure system over Canada that’s existed for that last year and a half, he said, has kept things on a below-normal track in temperatures.
Any eastern Pacific Ocean weather systems that have tried to develop have been pushed back, he said.
Although temperatures have been cooler than normal with abundant moisture many producers are facing high yield potentials as long as they can avoid a frost, Anderson said.
Predications for a killing frost have been slated for Sept. 20, he said. If it happens, it could complicate the crops’ ability to finish maturing.
However, Anderson said he thinks most of Iowa should be in the clear from a damaging early frost.
“I don’t think here in Iowa we are facing that kind of threat,” he said. “I might be more concerned had we not had the recent warmer conditions.”
Anderson said another weather threat developing is cool conditions in the northern Corn Belt states that shows no sign of stopping since a weak El Nino pattern is strengthening and moving north.
“We could have a wetter and cooler pattern than we would like to see,” said Anderson.
A timely harvest?
Anderson said there is concern for harvest be completed in a timely manner. This worry, he said, will affect producers more than the market resulting in combining grain with high moisture content.
“We could be seeing producers having to deal with commercial drying,” said Anderson. “This could be more of an expensive harvest than we would like to see.”
Looking past the harvest season, Anderson said he is forecasting a colder winter than normal, but most likely not the drastically cold conditions experienced last winter, and a fairly snowy start to the early winter which could also hinder a late harvest.
Soil moisture levels leading into 2015, Anderson should be ample, as many areas have been benefiting from the recent late-summer rainfalls.
Newsom said weather conditions are the talk in the country leaning toward a record national average of 170 bushels an acre for corn.
This questions how the marker will respond, he said, since corn has been the market leader.
The U.S. Department of Agriculture’s September supply and demand report can have a devastating affect, he said.
“That’s when the corn market could go to all new low,” he said.
If there begins to be any issues with weather, Newsom said, there could be a possibility that the corn market may stabilize and even begin to build higher.
Newsom said he could make an argument that by the end of 2014, corn could stabilize and start to climb back up.
“Fundamentally that’s not the case, but the monthly charts I look at don’t agree,” he said. “We won’t know until the end of September if the fundamentals will be right.
“The market could get worse, we just have to see what happens from now until the end of September.”
If producers have any old crop corn, Newsom said, they should get that moved before harvest.
There’s going to be a lot of grain moving into the system in a very short time, Newsom said, which will really crush the basis.
“Look for local demand and get the corn moved before harvest,” said Newsom. “Once the combines start to roll it will be 60- to 90-days before you will want to sell anything, so if you are still holding on to old crop, if I could get those cash sales made, I would.”
As far as soybeans, Newsom said, there appears to be a huge crop coming on, in addition to a large planting of soybean acres in South America.
Since it is common for soybeans to follow in the path of corn, there could be a possibility of soybean prices dropping into the single digits if that corn market doesn’t stabilize, he said.
However, Newsom said, there could be a good possibility those soybean acres are overstated, which could lead for a potential of a slightly bullish market.
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