Grain markets are flagging as frost fears fade, crop size forecasts increase and farmers start hauling to the elevator system.
“It really isn’t much of a factor anymore,” said Errol Anderson of Pro Market Communications about the frost fears that had been propping up crop prices.
“It’s quickly fading and if we got a frost right now, it’ll hurt some guys, but generally I think the worst danger is past.”
Late crops in the U.S. and Canada added a bigger than normal frost danger premium into late summer, but every day of good weather helps mature more of the crop and puts more into the bin. Since the beginning of September, warmer than average weather helped very late crops become just late.
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Prices have been gently falling as more reports show yield and quality to be better than expected in North American and also in Europe and Australia.
The U.S. Department of Agriculture supply and demand report of Sept. 11 supported that momentum.
Nearby corn futures slightly increased after the report but are still under $3.20 US per bushel, while soybeans fell to just above $9 per bu. and hard red spring wheat stayed under $5 per bu.
That compares to early June prices of new crop wheat of $8 per bu., $4.50 for corn and $11 for soybeans.
USDA forecast American farmers will produce the largest soybean crop ever and their second-largest corn crop. The findings were not outside average expectations, but the confirmation of big crops hurt the market, one analysis firm said.
U.S. crops got off to a late start in both the eastern corn belt and the northern Great Plains due to wet and cold conditions.
However, cooler and wetter than normal weather in the Midwest in August helped corn and soybean crops develop better than expected, and early reports from the Dakotas suggest crops there are a bit bigger and better than many had thought.
Fears of widespread frost damage are fading with the good September weather, but analyst Jim Bower of Bower Trading warned traders in Chicago not to completely dismiss the remaining danger.
“We still have got to be wary – and I underline that word wary –about the potential for an early frost,” Bower said at the Chicago Mercantile Exchange Sept. 11 after the USDA
report.
“There does look like there could be a cold air mass that is pooling to the north, probably drifting down into the southern Canadian Prairies, possibly into the northern tier of the United States.”
Bower said the weather service he uses predicts this for Sept. 23-24, with a chance at frosty weather for the eastern corn belt.
