Corn, Soybean Prices Tumble 30 Cents on Forecast for Cooler, Wetter Weather End of Week
June 14, 2021
The year of weather extremes continues across the U.S.
As areas of the South is battling intense rains and now flooding, portions of the Corn Belt, Northern Plains and West are seeing the opposite. Drought conditions continue to worsen for some, as the South searches for a reprieve from all the rain.
“We're watching a tropical system that could bring a lot of rain to that area late next weekend and early next week,” Michael Clark of BAMWX told AgriTalk Host Chip Flory on Monday. “A lot of agreement between both models that there could be some more heavy rains for that Southern region in particular.”
Over the weekend, portions of South Dakota and eastern Nebraska caught some rain. Clark says some areas received an half of an inch to one inch of rain, but he says those rain events were extremely localized. And now, the heat is entering much of the U.S. this week.
“Wednesday and Thursday, I'm expecting multiple Upper 90s- and 100-degree readings from Nebraska, South Dakota through much of Iowa, even into southern Minnesota,” says Clark. “So, a couple of days of very intense heat and really no rainfall over the next five days. We are looking at a better chance for rain coming into the next weekend.”
The extreme heat this week is on the heels of North Dakota experiencing record breaking temperatures with Bismarck even reaching 106 degrees earlier this month, which marks a new record.
“The models in the six to 10 day are very wet,” Clark told Flory. “And I believe that this is going to be incredibly important. These rains have to verify because if they don't, the weather conditions are going to rapidly deteriorate very quickly if we don't get rain in next 10 days.”
Darren Frye of Waterstreet Solutions told AgDay host Clinton Griffiths the pressure in the grain markets on Monday was rooted in the changing weather forecast.
“We were hot and dry on Friday and the forecast was for no rain that we're seeing over the weekend,” Frye said. “And then as the weekend progressed, you saw the models turn a little wetter and cooler. On Sunday, we opened up a lot lower here last night, but there is a promise of wetter moisture coming out of the Gulf, a lot of moisture from that tropical storm, and then the the ridge back West. So, we could see some rain and very important crop production areas like Iowa, obviously southern Minnesota, eastern Nebraska , which wasn't forecast just three days ago.”
The change in the forecast sent corn and soybean prices plummeting, with September corn down 32 cents at one point Monday. Soybean prices also saw pressure from the wetter forecast, as the August contract fell 40 cents.
“Up north in the Northern Plains and the upper Midwest, I think there has been some serious stress put on that crop already,” Frye said. “Whether it's really created the damage and reduced yields yet to be seen. But obviously another two or three weeks toward pollination, it definitely would put the hurt on that.”
If the rains materialize, how much more could prices fall? Clinton Griffiths gets the answer from Frye in AgDay’s analysis.