Already a 'critical' weather weekend?
Apr 13, 2012
From The Editor
April 13, 2012
Hello Pro Farmer Members!
It rained a bit in northeast Iowa this morning, but now it's just windy and cold. We've got a chance for more rain tonight and tomorrow, but so far it's been a bust. There is some rain in northwest Iowa, S. Dakota and in Minnesota right now, but it's been mostly light so far. A nice rain made its way across Missouri and is now in downstate Illinois.
That little radar update is to emphasize how important this round of rain chances really is. I know... we're not going to make or break a corn crop on April 13, but some rain now (actually... a good soaking rain) would be a strong signal the pattern is starting to allow some more moisture into the Midwest. And by the looks of the U.S. Drought Monitor, better than one-third of the U.S. corn crop is experiencing "abnormally dry" conditions or drier. So... a sign that "good rain" can make its way into the Corn Belt would be a relief.
And heads up this weekend. The risk of severe storms in the Central Plains is very high for tomorrow and the risk of severe weather extends into the central Corn Belt.
Getting a clear picture of just how much rain fell... and where it fell... on Sunday night/Monday morning will be absolutely critical to the price performance in corn futures next week.
Spread action in the corn pit this week continues to be bullish with nearby corn futures at least holding onto a premium over deferred futures. And by the end of the week, the bullish spread action in corn was joined by strength in the basis market in some key areas. It certainly suggests corn prices are back down to levels that are attracting additional export demand... and probably from China. We made quick mention of this on the front page of Pro Farmer this week, but Chinese old-crop corn bookings are already on the top side of USDA's projection in this week's Supply & Demand Report. That means USDA should increase estimated exports in the May S&D Report... but don't be surprised if that means another cut to estimated feed & residual corn use. As I explain on page 4 of this week's newsletter, the last time USDA held corn carryover steady for three consecutive months, it started a string of higher corn carryover estimates that ultimately led to last year's official carryover of 1.128 billion bushels. We could be headed back to close to that level again this year. Where USDA will cut the demand from is a tough call... but the analysts there have made tough calls in the past and will probably do so again in the future.
That's it for now...
I've got a busy weekend ahead. First, the trap-shooting club I coach will have its first league shoot tomorrow! (Great weather for it, huh?) On Sunday, we've got a trip to Ames to watch the ISU National Ag Marketers Association (NAMA) practice for competition coming up in Kansas City. Should be a fun weekend!