Chore time for me isn't what it used to be when I was growing up on our eastern Iowa farm, but taking care of two horses in the morning before I head in for work gives me a little time to think about the day ahead. Each morning, stop at this spot to get a feeling for the "tone of the day" - and some attitude about agriculture and the markets.
I was thinking…
... Okay -- I know I haven't updated the blog for a while, but that was by design. I knew if I sat down to write about Midwest crop conditions before giving crops a chance to recover, I'd be talking a doomsday scenario for the crops. So, I stayed away from updates with the idea the crop would recover and give me something more optimistic to talk about. Well... here it goes --
The corn crop is recovering -- well... at least some of the crop is recovering. I'm not saying the crop in previously saturated areas is recovering 100% of its original yield potential. I'm just saying the crop is greening up and growing again. And in some cases, the crop is growing very quickly as it taps into nitrogen remaining in the soil -- or if growers have had a chance to lay down some more nitrogen right next to the root zone.
But, it is NOT a uniform recovery. In fact, as some parts of fields recover, it becomes exceptionally clear where the real damage has been done. Yes, there is still some water standing in fields, although much of it has drained away. That's what I call "obvious damage" areas and assessing yield impact on those areas is very easy -- it's typically got zero yield potential. So from that perspective, it's just a question of figuring out what percentage of the Midwest crop has that "obvious damage."
That's part of the reason USDA is resurveying growers for planted acres and harvested acres for the June 30 Acreage Report. Hopefully, USDA will figure out we'll likely see a lower-than-usual harvested acreage percentage on both the 2008 corn and soybean crops and reflect that in the acreage report. For the July Supply & Demand Report, USDA will use the June Acreage data. For the August Crop Production Report, USDA will resurvey for planted acres and harvested acreage intentions again. So, but the time we get to the August Crop Production Report, USDA should have a good handle on lost acres -- but I won't guarantee that. USDA in the past has revised harvested acres as late as September in the year following the year the crop was harvested -- at the end of the crop's marketing year. That means that despite USDA's best efforts, we may not know how many acres have been lost until September... of 2009!
The other thing that is becoming abundantly clear is the general damage this year's corn crop has already sustained. I say that because corn fields run the spectrum of colors from yellow to dark green -- all in the same field. If those plants that are still yellow were going to recover, they should be greening up like their row-mates just a few feet away. Who knows what the problem is... compaction, leached nitrogen, root damage... combination of all of those things and probably some issues I didn't list.
And development of the corn plants that haven't tapped into the "good stuff" in the dirt yet is very slow. So -- cornfields are already taking on a wavy look with a variety of colors. Oh... and you can very easily tell where tractors traveled in most cornfields... that where entire yellow rows are framed by green(er) rows on both sides.
In summary, the corn crop is recovering at many different levels and at several different paces. The generally poor recovery of the crop is what we fully expected, but certainly not what we hoped for.
On soybeans, I don't even know what to say. This crop is very slow to develop. Plants are exceptionally small for the end of June. The canopy in drilled beans is still wide open and weed problems are getting worse every day. Growers are getting fields sprayed, but it's ugly out there in bean fields right now. And the plants are so small, there's really no way to tell how much yield potential they've got. And in some fields, the plants seem to be a little "misinformed." In a few fields, 4-inch-tall plants are round little balls with dirt-covered leaves from the last pounding rain we got around here back on June 11-12. I have no idea what those plants are going to produce. And speaking of producing... soybean's reproductive phase is triggered by the time of the year. And beans that did get planted in late May (early to mid-group 2s) should start to flower when summer starts. Well... summer has started and it's scary to think how much yield potential these small, but flowering, bean plants have already lost this year.
Suspensions lifted for insecticidal seed treatment products for use in oilseed rape
Tough for position traders but great for day traders!