Here we are, with the end of July upon us. It also feels like the end of what I call the “too-too” season. You know too cold, too hot, too wet, too dry. In the last few years, I’ve finally come to realize that these new-generation hybrids can handle a lot of the variability that many of our ancestors struggled with. I realize that there are certain areas that are still struggling without moisture and that in those areas, yields have been impacted significantly. But just think where we’d be without the advances we’ve seen in just the past 5 to 10 years. It’s amazing to me that a crop can survive at all for more than 30 days in July without anything close to “normal” rainfall.
A look at the crop conditions for corn on Monday afternoon (7/27/2020) bears that out. Nationally, we’re now sitting at 72% in the Good to Excellent categories, up from 69% the previous week, and 58% last year. On average, over the past five years, we’ve seen 67%. It’s a slightly different story for Iowa, as the state dropped 3 points, down to 77%, but still ahead of last year’s 65% and the average of 75%. A all of the other “major” corn-growing states gained this week. The big gainers this week were Illinois (up 11 points to 74%), Nebraska (up 9 points to 75%); and Indiana (up 6 points to 65%). Some would also throw Ohio in the mix, but with “only” 3.6 million acres of corn, I think their impact is generally overstated. Kansas now grows 5.3 million acres of corn; not bad for “wheat” country. They also gained 6 points this week to get to 60%.
There is a similar story in soybeans, with the national average also gaining 3-points to hit the same 72% in the Good to Excellent categories. Last year was 54%, with the 5-year average at 64%. Iowa also lost 3 points here, hitting 76% vs. 62% last year and 72% on average. But again, most other states gained significantly. Illinois jumped 9 points to 76%; Nebraska was up 9 to 80%; Indiana gained 5 to hit 65%; Minnesota was up 4 points to 84%; South Dakota hit 84%, up 3 points; even Kansas added 10 points to get to 67%. For beans, we’re still going to be concerned about the weather during August, but it’s feeling like a couple of decently timed rains will push yields beyond the USDA’s current 49.8 expectation.
So, if we’re not going to worry about the weather (especially for corn) what else is there that can impact values? Here’s a shortlist:
- Weekly export sales and inspections reports
- Will Chinese buying continue or slow as we approach November?
- Will other “normal” U.S. customers continue their recent strong purchases?
- Anything/everything Covid-19 related
- Increases/decreases in cases/deaths across the U.S. and worldwide
- Impact on gasoline and ethanol demand
- Anything/everything geo-political
- Chinese relations with the U.S., as well as India and other countries
- Mideast tensions (Libyan civil war; ongoing Saudi Arabia/Russia tensions, etc.)
- Interest rates
- Both U.S. and worldwide
- Impact on currency values
- USDA’s World Ag Supply and Demand Estimates (WASDE) will be updated August 12th
So, even though we are getting to the end of the time when the weather is the main concern, there are still plenty of other items that can and will drive prices. We continue to encourage wrapping up old crop sales and putting some offers in on new crop for anything that you need to move during harvest. Just contact your local Grain Marketing Advisor or Customer Service Specialist.