Joe Victor is a Business Development Specialist with Minneapolis Grain Exchange, Inc., where he monitors cash grain activity and cash grain opportunities. He provides marketing advice through this blog.
2010 Weather is A Lot Like
Jul 29, 2010
Allendale Inc was informed this week that weather thus far in 2010 is similar to the weather of 1998 and 1983. Our first reaction was to check yield and the season average farm price recorded by USDA as it is what is traded. Please view this chart
Before we get to the meat of the matter, take a good look at the corn yield and SAFP just from 1998 to present day July as corn yield has increased 26% and the SAFP has increased dramatically from $2.15 to $3.75. Chalk up the big increase in the season average farm price in 2010 as corn is not only used for feed, food and exports but growingly now for fuel. Soybean yield from 1998 to present day has been 8.6% as research dollars find its way into the corn first and foremost.
You are able to see how weather increased the corn yield and decreased the SAFP from the month of July into the January annual report but had a reverse impact in 1983. Insert your thoughts of genetically modified organisms here as a big difference maker between 1983 into 1998 and into 2010.
You can look at the yield for soybeans and see how both in 1998 and 1983, it went lower. My question is not corn and soybeans grown in the same region and is weather more important for beans than corn?
It is time to yield check your corn and make certain you are hedged at the level your marketing plan suggest. Soybean weather is key for the last week of July and the first two weeks of August. As long as pod fill moves forward rather than backwards, increased hedges on new crop may be placed.
We welcome your questions.........Joe Victor
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