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Welcome to a Weather Market

May 19, 2012
By: Sara Schafer, Farm Journal Media Business and Crops Editor

Multiple weather sources are predicting hot, dry conditions in the Corn Belt and other areas of the country.
USDA's Joint Ag Weather Facility reports that on the Plains, beneficial rain showers dot northern and central areas, but hot weather persists across the remainder of the nation's mid-section. Friday’s high temperatures were predicted to approach 95°F as far north as the central High Plains.
Across the heart of the Midwest, warm, dry weather favors soybean and final corn planting efforts, as well as rapid development of summer crops and soft red winter wheat.
The National Weather Service’s 6- to 10-day outlook for May 23-27 calls for above-normal temperatures from the central and southern Plains into the Midwest and Northeast.
Gulke Group President Jerry Gulke says normally early planting takes away the risk of not getting a good crop. That is, as long as those early-planted crops aren’t burned up by high summer temperatures.
He says marketers already have a concern over July weather, with some experts predicting we may not reach trend-line yields.
"We’re going into the season now where it could be a long summer if we don’t get a return to normal weather."
Gulke says his fear is the current dry forecasts could rally the market and then a forecast comes out calling for a more mild and wet weather. "You have to be ready to hedge grain or sell some more cash. Flexibility is really important right now."
We’ve got to be careful here because we are one big crop problem away from having enough global stocks, he says.
Kevin Van Trump of Farm Direction says the corn market will definitely focus on weather the next several weeks.
"I continue to hear talk from producers who are experiencing more dry conditions than normal, but at the same time many actually tell me they would prefer this over conditions that are too wet. The dry conditions this time of year often allow the corn crop to establish extremely deep-roots which prove to be more beneficial in the long run."
Van Trump says dry temperatures definitely need to be monitored, but it is still a little early to be "wildly bullish" on these reports. 


Listen to Gulke's full audio analysis:


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