Crop prices have rallied to a new, higher range, but the volatility within the range has increased as traders react to each changing weather forecast.
Prices rose last week as corn entering its reproductive stage in the U.S. western corn belt fried in temperatures in the mid 30s C.
They dropped back as cooler weather entered the forecast for this week.
Models show Midwest temperatures could stay moderate through the first week of August.
However, large parts of Iowa, Indiana and Nebraska, the top three corn states, still have significant rainfall deficits. In the eastern corn belt of Indiana and Ohio, there is too much rain.
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USDA’s August corn yield estimates are bearish
The yield estimates for wheat and soybeans were neutral to bullish, but these were largely a sideshow when compared with corn.
The July 24 U.S. crop condition report’s good-to-excellent rating for soybeans fell four percentage points, more than expected, to only 57 percent, compared to 71 percent last year.
Corn fell two percentage points to 62 percent, down from last year’s 76 percent.
The northern Plains have been hot and in drought all through the growing season, and the spring wheat crop’s good to excellent rating is only 33 percent, down one point from the previous week. Last year it was 68 percent.
The annual U.S. spring wheat tour that started early this week will issue a yield and production forecast to compare against the U.S. Department of Agriculture’s forecast of 40.3 bushels per acre and 422.9 million bu., down 21 percent from 2016.
Our website will have the results of the tour and its forecast of production.
