Soybean, corn prices soar as crops thirst

June 20th, 2012

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Category: Grains, Oilseeds

(DesMoines Register) – Hot, dry weather and rain-scarce forecasts caused panic buying Tuesday, as corn and soybean prices soared and concerns rose over crop conditions.

“We are experiencing a weather-driven market,” commodity analyst Alan Brugler of Omaha said.

The dry conditions have reversed earlier predictions of a bumper crop this year, which was expected to replenish tight supplies and help ethanol plants, livestock feeders and other users of the crops.

November soybean prices jumped 45 cents per bushel to $13.84, and December corn rose 29 cents per bushel to $5.63. U.S. Department of Agriculture crop ratings support the contention that the hot, dry weather is hurting the 2012 crop. On Monday, the USDA lowered its good-to-excellent ratings for soybeans to 56 percent nationally, compared with 68 percent this time last year.

Of particular concern are the crops in Indiana and Ohio, respectively the fifth- and sixth-largest soybean-producing states behind Iowa, Illinois, Minnesota and Nebraska. Severe drought lowered good-to-excellent soybean ratings to 32 percent in Indiana and 40 percent in Ohio.

Iowa’s soybean crop was rated 61 percent good to excellent, down from 83 percent last year, when the state had ample rain.

Iowa’s corn crop was rated 67 percent good to excellent, down from 84 percent a year ago.

“My soybeans are just sitting there,” said John Heisdorffer, who farms near Keota.

Heisdorffer said his area had received 1.4 inches of rain. “That’ll be gone in a day or two. We’re dry,” he said.

The National Weather Service forecasts cooler weather the next few days, with high temperatures in the 80s and thunderstorms today and tonight over much of Iowa.

Precipitation will be crucial in the next two weeks, during which silking and pollination most likely will begin for Iowa’s corn crop. Agronomists say that corn generally pollinates best in temperatures in the upper 80s. It can handle higher temperatures, but only with adequate soil moisture.

The USDA has rated more than 40 percent of Iowa’s topsoil and subsoil as moisture-deficient.

Analyst Arlan Suderman observed what he called the “euphoria” of the market Tuesday on the Chicago Board of Trade. But he cautioned that a weather market can change quickly.

“Cooler temperatures are expected during the (next) six-to-15-day period,” Suderman said. “But significant rain relief is not. Things could quickly change if the rains were to return in time for the bulk of the crop’s pollination. Soybeans would also dramatically benefit from such a change in the pattern, including increased double-cropping in the southern belt.”

While corn prices had softened and dipped below $6 this spring for the first time in more than a year, soybean prices had remained high on forecasts of tight supplies through the end of this year.

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