Apr 23, 2014
Home| Tools| Events| Blogs| Discussions| Sign UpLogin

Instead of Rainfall, Markets Fall

June 2, 2012
By: Sara Schafer, Farm Journal Media Business and Crops Editor
Dry cracked ground
  

Weather continues to be a main theme in the grain markets, as well as the global economy.

 
High hopes and prayers for rain this week were answered for some farmers, but not for others. This week’s Drought Monitor Index shows that out of the 18 major corn-growing states, only a few aren’t suffering from abnormally dry or drought conditions.
 
drought monitor 5 31 12
 
Isolated showers fell on parts of the Plains, but May will still go down as a very dry month across large sections of the central and southern Plains, according to USDA's Joint Ag Weather Facility. Many of the area’s summer crops and maturing winter wheat are under increasing levels of stress.
 
In the Corn Belt, cool weather prevailed at the end of the week, in the wake of a departing cold front. A few showers lingered across the eastern Corn Belt, where recent rains have benefited corn, soybeans, and winter wheat, but have not completely eradicated short-term dryness
 
Looking forward, the National Weather Services is predicting warmer- and drier-than-normal weather across the majority of the U.S. for June 6-10.
 
Several weather experts have come out and said they are really concerned about the crop this summer, says Jerry Gulke, president of the Gulke Group. "After the limited rainfall that came through this week, there’s not much rain in the forecast for the next 10 days."
 
With a lack of rain and declining crop condition ratings, Gulke says you would expect that markets would surge in light of a reduced supply. But, that wasn’t the case this week.
 
July 2012 corn closed at $5.56 on Friday, nearly a dime off the high, and September 2012 corn dropped to $5.16. Soybeans didn’t finish the week much better, with July beans up a few cents and September beans falling to $12.84. See the market movement charts for the week.
 
Gulke says it’s like the market doesn’t care needed rain may not fall. "It’s saying ‘Jerry I don’t care what type of crop you’re going to get. The demand won’t be there to eat whatever you produce.’ That’s really a scary situation."
 

Global Concerns Heighten

In addition to weather scares, Gulke says the markets are also volatile due to the global economy.
 
"The European situation is getting worse, and that could spread to the United States and China."
 
He says during the last few months, a systemic change in the outlook of attitudes about agriculture has taken place. The lure of high commodity prices has seduced a lot of farmers, in the U.S. and around the globe, to increase acreage.
 
Ideally, Gulke says, we could hold global demand stable. "But, if global demand would begin to shrink, in an atmosphere of us producing more acres around the world that would be a recipe for disaster. We are beginning to see this unfold."
 
Listen to Gulke's full analysis:

 
 

For More Information
 
See your farm's forecast with AgWeb's Pinpoint Weather.
 

 

 

See Comments


 
Log In or Sign Up to comment

COMMENTS (4 Comments)

longkansascitywheat.wordpress.com - Nashville, TN
Mr. Gulke's crop reports seem to be coming from the Northwest, where in fact moisture maps look much better than the rest of the corn belt.
11:03 PM Jun 2nd
 
PullMyFinger - Chappell, NE
Seems logical from the Bozos on the floor.
8:48 AM Jun 2nd
 
GENE - OKAWVILLE, IL
This is my 50th year of grain farming here in Washington county, Ill. so, needless to say, I have seen it all. We have had no meaningful rainfall in 5 weeks now. The only May that was similar to this year was 1988. For those of you over age 45, I need not tell you what the Summer of 1988 brought us. For those too young to remember, check the crop-production records. Remember, we have had no devatating heat, as of yet. 105-107 was common that year.
8:00 AM Jun 2nd
 
GENE - OKAWVILLE, IL
This is my 50th year of grain farming here in Washington county, Ill. so, needless to say, I have seen it all. We have had no meaningful rainfall in 5 weeks now. The only May that was similar to this year was 1988. For those of you over age 45, I need not tell you what the Summer of 1988 brought us. For those too young to remember, check the crop-production records. Remember, we have had no devatating heat, as of yet. 105-107 was common that year.
8:00 AM Jun 2nd
 



Name:

Comments:

Hot Links & Cool Tools

    •  
    •  
    •  
    •  
    •  
    •  

facebook twitter youtube View More>>
 
 
 
 
The Home Page of Agriculture
© 2014 Farm Journal, Inc. All Rights Reserved|Web site design and development by AmericanEagle.com|Site Map|Privacy Policy|Terms & Conditions