Grain prices increased this week, in part due to soil moisture levels decreasing.
Many crops in the Corn Belt were planted significantly earlier than normal this spring. But, will that early start provide them a strong footing to survive a hot, dry summer?
That’s the question being determined by the grain markets right now.
"Weather is still on the front burner," says Jerry Gulke, president of the Gulke Group.
The main weather news that surfaced this week is that drought and drought-like conditions are starting to engulf many key corn-growing states. Abnormally dry and moderate drought conditions have crept further north, taking over the majority of Missouri, Kansas, Iowa and Illinois.
See the latest U.S. Drought Monitor:
David Miskus, of the Climate Prediction Center,
reports that although cooler air finally filtered into the northern Plains and Midwest, the combination of a very warm and dry May (less than 50% of normal rain) in the lower Midwest, plus the emergence and growth of crops that require adequate topsoil moisture, has quickly deteriorated conditions in parts of the Midwest.
Yet, rain did fall on parts of the Plains and northern Corn Belt to relieve some dry conditions. This mixed weather news has left the markets spinning, Gulke says. "For the last five or six days, we’ve had three or four reversals in the corn market. That is really jerking a lot of people around."
Gulke says until a major weather situation unfolds, the markets will stay influx. "We’re going to have to put up with this until we get a hot-and-dry trend that doesn’t break or a wide-sweeping front that drops 1 to 1 ½ inches on 70% of the Corn Belt. The market is buying time, price and weather information every week and day until we get closer to harvest."
Listen to Gulke’s full audio analysis:
Price Moves of the Week
Corn finished the week $.30-$.50 higher, while soybeans surged over $.80 higher. Wheat ended around $0.15 higher. For more analysis of this week’s grain price movement, read: Dry Weather Induces Grain Price Rally
On Monday, visit www.AgWeb.com
to hear Jerry’s pre-report analysis of the June 12 Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports.
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