Views on commodities and energy
The Rain Keeps Coming: No End in Sight This Week
This spring is definitely a classic case of Rain Doesn’t Always Make Grain.
Powerful storms pummeled the U.S. heartland over the weekend — an area that’s already soaked after a week of heavy rains — increasing the likelihood that this year’s corn and soybeans will not reach their maximum yield potential.
“There are Noah’s Ark-like conditions in the Midwest through next week,” said Vic Lespinasse, analyst for grainanalyst.com.
All week the western belt was the hardest hit. Day after day there were reports that areas received a couple inches of rain. Young corn and soybean seedlings were standing in flooded fields, not only limiting the development of their root systems but actually suffocating plants.
Then this weekend violent storms ripped through the Midwest again, spawning tornadoes in Iowa, Wisconsin, Illinois and Indiana on Friday and Saturday.
In Indiana, for instance, travelers saw miles and miles of corn fields with plants 4-5 inches of growth standing in water that resembled Vietnam rice paddies NOT Midwestern row-crops.
This is especially worrisome this year as farmers hoped for ideal growing conditions given the huge world demand for grains and oilseeds for food and feedstocks to produce biofuels.
All the rain means many corn and soybean fields will need to be replanted and heightens the possibility of fungal diseases in the maturing Midwest soft red winter wheat crop.
Already, many U.S. grain analysts are expecting the U.S. Agriculture Department, in a rare move, to shave its production estimates in Tuesday’s monthly crop report. Typically, USDA does not make any adjustments to yields or acreage this early in the season, but many analysts feel there’s reason to do it this spring.
The closest comparison to this season’s weather is 1993, meteorologist Mike Palmerino with DTN Meteorlogix said this week.
That summer U.S. crops suffered from weeks and weeks of rain which eventually caused the Mississippi River to flood — washing out surrounding corn and soybean fields in the heart of the crop belt.
“What’s different this year is the rain has started earlier than in ’93,” Palmerino said.
So, a combination of record high crude oil prices and the current unfriendly weather for crops does not spell a return to cheap food any time soon, analysts say.
Photo: Washed out corn field near Goodland, Indiana, about 100 miles southeast of Chicago, following torrential storms and high winds that hit the area on June 7. Photo taken by Julia Bohan on June 8.