Freezing Temps, Rainfall Fuel Higher Grain Prices

October 6th, 2014

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Category: Grains, Oilseeds

weather450x299(Agriculture.com) – Frosty and freezing temperatures, a little of the “white stuff” and continued rainfall in the short-term forecast all highlight a weather outlook that’s not the most friendly for corn and soybean harvest and winter wheat planting in the nation’s center.

Temperatures dipped below freezing in the northern Plains and Corn Belt, while snow fell in parts of Minnesota, Iowa, Illinois and Wisconsin over the weekend, marking a shift away from earlier forecasts, weather-watchers say. Now, while harvest will be able to resume in earnest in some spots, it will remain relatively slow in much of the nation’s center at least the first part of this week.

“Corn/soy will only see showers in the eastern 1/4 of the Midwest and northern half of the Delta today/tomorrow. More notable rains return later this week, with a second surge possible early next week,” according to Monday’s Commodity Weather Group (CWG) Ag QUICKsheet. “This will slow harvest considerably in the southeast half of the Midwest and northern two-thirds of the Delta. The northwest half of the Midwest avoids most rains.”

Temperatures reached their chilliest from the Dakotas to Wisconsin, with temperatures in the former region dipping as low as the lower 20s. According to MDA Weather Services senior ag meteorologist Don Keeney, temperatures were lowest in western and northwestern North Dakota, where the mercury dipped to as low as 22 degrees Fahrenheit. And, moving into the new week, temperatures will likely continue to yield more frost.

“Frost was widespread in the northwestern Midwest this past weekend, including the Dakotas, northwestern Iowa, Minnesota, and central and northwestern Wisconsin,” Keeney says. “A hard freeze was also noted in the Dakotas. Cooler temperatures should return to the northwestern Midwest later this week and next weekend, resulting in some additional frost there.”

Looking ahead, a combination of cooler temperatures and sporadic rainfall over the next few days could keep harvest progress spotty and slow, Keeney adds, at least in the lion’s share of the Corn Belt. Things should dry down better in the northern part of the region this week. That window will likely again close next week, though.

“Cooler temperatures should return to the northwestern Midwest later this week and next weekend, resulting in some additional frost there. Rains in the eastern Midwest have slowed corn and soybean harvesting, and additional rains in the southern Midwest and northern Delta much of this week will keep harvesting there very slow,” Keeney says. “Meanwhile, drier weather in the northwestern Midwest will favor drydown and early harvesting there. Additional rains in the southern Midwest and Delta in the 6- to 10-day day period will keep harvesting slow.”

And, those conditions will be a double-edged sword for Plains wheat farmers: “An upturn in rains in the south central Plains later this week will slow winter wheat planting, but will improve moisture for germination and establishment,” he adds. Commodity Weather Group’s Monday report shows Wheat Belt rainfall will be heaviest and most frequent in parts of Oklahoma, where rainfall remains badly needed.

Does the weekend’s weather foreshadow a tough winter? Some say yes. “If the last event and [weekend temperatures] are harbingers, it’s going to be a cold winter,” says Agriculture.com Marketing Talk veteran advisor.

Marketing Talk veteran advisor jennys_mn: “My former neighbor over in Central Wisconsin sent me some pictures of the snow cover there overnight. We haven’t turned the heat on in the house yet,” jennys_mn said over the weekend. “It was 62 in the house when we got up this morning, now at 10:00 AM it’s up to 65 and it’s 43 outside. We haven’t had any sun yet — I’m hoping we get some sun to warm our house up. I might have to break down and start the corn stove up.”

The cooldown may be good news for the grain market bulls, though; overnight trading helped send the corn and soybean markets higher, and Monday’s expected to see slightly higher prices as concerns about the weather — and resulting harvest delays — continue to mount.

“The USDA Crop Progress this afternoon is expected to show corn harvest at 16% complete (versus normal at 31%)  and soybean harvest at 18% complete (versus normal at 40%). In the U.S. grain markets overnight, the grain market are all higher. This is in response to weather concerns in the U.S. and in South America,” says Kluis Commodities market analyst and broker Al Kluis.

Adds Agriculture.com analyst and grain options specialist Scott Shellady: “A pretty chilly weekend here in Chicago. Markets are up on decent demand stories due to the recent sell off. I can’t help but think that some shorts were squeezed out from the cold weather. Doesn’t really matter now but I am sure that it caused a few nervous people to buy.”

 

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