No Dog Days This Summer - Monday, 21 July 2014

No “Dog Days of Summer” this year!!  The arrival of some normal July temps and humidity have been long awaited and welcomed but unfortunately it will all be much too brief according to the short and long term weather outlooks. 


The forecast for next week, July 27th –August 2nd looks for belownormal temperatures and normal rainfall for the Midwest with no change in store beyond that for the 30 day outlook as well.  So enjoy the heat while we have it, it won’t be here for long.  Rain is expected by this weekend in almost all growing regions with rain totals expected to average between 1-2 inches.  2014’s cooler than normal month of July is on course to enter the history books as the 4th coolest in recent year, falling in line behind the years of 2000, 2004 and 2009.  Record breaking corn yields were posted in both 2004 and 2009, perhaps a pretty good indication of what our yields may look like again this year. 

Some analysts have been suggesting that the national corn yield average could stretch as high as 170 bushels per acre, with pockets of 250-300 bushels per acre.  The USDA has been predicting a bumper crop for many weeks now, this week the U.S. crop conditions rating stayed at 76% good to excellent.  Missouri leads the way with 86% good to excellent followed closely by Illinois, Michigan and Pennsylvania with 81%; North Dakota comes in with 79%; South Dakota and Tennessee 78%; and Iowa 77%.  (The full corn and soybean report is listed at the bottom) 

All of this speculation is just that though at this point…things can and do change.   For example in 2010 the USDA made many adjustments to what was predicted to be a NEW record corn crop of 165 bushels that year. 

2010 USDA Corn Estimates:

August: NEW record high of 165 bu. /acre

Weather conditions began to change…

September: 162.5 bu. /acre

October:  155.8 bu. /acre

November:   154.3 bu. /acre

December:  Remained the same

The Final January 2011:  152.8

One analyst said that producers have 2 more opportunities, in his opinion left to sell:

  • The August Crop Report
  • A frost scare-with all of the cooler than normal weather we have seen so far this season, it doesn’t seem impossible that we could see an early frost.  In 1992 and 2004 we also experienced a cooler than normal summer followed by frost in late August/early September causing a quick market rally.

The Fund’s continue fight the technical trend and remain net long the corn market.  Last year we had a similar situation, when they shifted gears though and went heavy with short positions our price fell to $4.10.  If the Funds begin liquidating their long positions this time around a drop of another $.40 is possible from current prices.  We all like to believe that this won’t happen but corn prices in the U.S have a history of being below the cost of production much more often over the years than above. 

Soybeans are in a similar situation.  *Too much carry over * too many acres planted and *too high of yields expected.  China was a big buyer of beans this week; they need 50 million + every week, but lag significantly behind their purchases of just one year ago.  Unfortunately the trade isn’t really focused on demand, right now they are mostly focused on our seemingly abundant supply.


Sheila and Pam will be out of the office and unavailable for questions on crop insurance from July 21-July 25.  If you have weather related claims to turn in or need immediate assistance on crop insurance matters, please call Tammy Makela (RCIS) at 763-323-2256 or  if you are a customer of RCIS.  If you are a customer of NAU please call 888-784-4483 and ask for Robbie Fleener or  these two are our Ag Performance underwriters.  If they cannot answer your questions, they will find someone that can.

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