Views on commodities and energy
July: The Month of Corn
The next several weeks promise to keep traders nervous and prices volatile as the corn crop goes through its most critical yield-determining development stage, pollination.
Any changes in the weather outlook will send shivers through the market. Monday was a case in point. A forecast for scattered, beneficial showers across 80 percent of the U.S. Corn Belt sent Chicago Board of Trade corn prices sliding the 30-cent trading limit.
This year corn will pollinate about two weeks behind its usual pace, agronomists say, due to cool spring weather and growth-retarding heavy June rains in many areas.
That means most corn plants will pollinate in late July — typically the hottest and driest period of the summer. A deep, mature root structure to tap groundwater is the key to good pollination and a question mark over lots of corn this year.
“Then on the backside of the season it tends to push maturity a little closer to a killing fall frost,” said Bob Nielsen, extension agronomist at Purdue University in Indiana.
The U.S. Agriculture Department reported late Monday that only 6 percent of the corn crop was silking, behind its typical pace of 19 percent by early July. Silks, the female part of the plant, extend from each ear of corn and catch the pollen from the male part, the tassel, to produce each kernel of corn.
Traders will also increasingly focus on growing degree days, or GDD, a measure of heat accumulation and a barometer of yield potential. Corn likes hot days and cool nights. But heat makes corn, as long as the roots provide enough moisture.
Given the cool start to the season, the crop is running well behind in growing degree days. State crop reports will typically will list growing degree days updated each week and compared to seasonal averages.
“Many corn hybrids require 2,600-2,700 growing degree days from planting until the crop is mature,” Nielsen said.
So corn traders are fastening their seat belts. With USDA already projecting September 2009 US corn stocks to fall to a 13-year low, any heat-related losses in the maturing U.S. crop — even with the question of flood-related losses still up in the air — will no doubt drive expectations for sharper cuts in the market’s thin cushion of supplies. Market prices will tend to rise as those expectations fall.
“Knee-high by the Fourth of July”
Photo of a corn field in northern Illinois taken over the July 4th weekend. An old benchmark used for years to gauge corn development. Typically, corn planted mid to late May will easily be knee-high by July 4th. But corn seeded in late April should be chest to head high by now. June-planted corn will be below the knee. Corn planting ran easily one to two weeks behind normal this year.