Markets unPACKed: The Great Corn Tour
The Great Corn Tour
In the last 10 days, the Pack Creek team has hustled all over the corn belt to meet with clients, prospects, strategic partners — you name it.
This is an extremely important time of year for new crop corn marketing. Typically, seasonal programs are wrapping up or have just a couple of weeks left ahead of harvest. The USDA will also put a firm estimate on yields. Good pricing windows close in, generally. Once everyone remembers a historic year of harvest months’ price action exceeding summer months, producers want a repeat.
Now that we have visited 10 different areas of the corn belt, let’s break down how the crop is doing and the opinions of that region — while trying to avoid “Backyarditis.” In that spirit, we are going to move east to west with this summary of our tour.
Maryland
Corn is looking great and had sufficient rains, almost better than expected. Their growers are about 70% priced with no concern to yield loss. They are looking to long-only strategies once their new crop is sold to continue to participate if drought concerns in the Western corn belt materialize.
Central Ohio
They are doing well with decent rains. They will need to see moisture in August for soybeans, but no concern of yield loss with current weather. Growers are about 60% sold but it is important that we understand this region. The Eastern part of Ohio usually just sells the cash while the Western part uses HTA contracts. They are urging their cash sellers to forward price now as they do not believe these prices will sustain through harvest.
Northern Illinois
Both corn and beans are looking good and while moisture has been extremely variable in the region in June, July saw some timely rains that helped the crops. Their growers are about 50% sold in their new crop and continuing to make sales this month.
Wisconsin
Wisconsin corn growers had a very hot summer and only five inches of rain, all at once, in the central Wisconsin region. They reiterated that the crop in the area was not in any danger but had localized issues that would lead to yield variability between/within fields. They had about 50% new crop sold.
Northeast Wisconsin
Rains have been missing this area and will need “rain every week” to get a decent crop this year. The growers are very concerned and forward contracting has ground to a halt. Some are worried that the crop won’t be there, especially without the moisture needed these past three weeks of July. Estimates are about 40% of new crop sold.
Central/Eastern Iowa
As we drove through Iowa, there was variability in crop height with Eastern Iowa looking a bit shorter than central Iowa. We wouldn’t be concerned about yield loss yet though, just lesser quality.
Western Iowa
Elevator Comments: The crop is looking good in the West/Central region of Iowa as it tassels and stands at seven feet tall. Although desperate for rain in early July, enough sprinkling has come through to retain soil moisture. They have had some variability with crop conditions but overall they are okay.
August is looking concerning for their region with a hot and dry 6-10 day forecast. Growers are about 40% sold. The Elevator is very focused on getting their growers to finish their new crop sales in the next 60 days because they are confident that prices will come back in at harvest due to excess supply in the market. Growers are urged to make sales or put target orders on because they think it won’t get much better than current levels.
Northwest Iowa
The area has extreme variability in rainfall, which is leading to some growers having great crops, and others worried about having no crop. The difference is field to field, and it is wild to see how pocketed the rainfall has been. By early May, they started seeing growers hold off on pricing new crop. As of now, growers are not selling new crop until they are confident they have the crop, so they are being ultra-conservative. The corn is tasseling but early maturity is a concern, which would lead to popcorn-like kernels and early harvest.
Southern Minnesota
As long as some rain falls each week between now and harvest, they will have a record crop. What they are watching for are frost conditions in Brazil. This area experienced frost damage about five years ago and they reiterated the consequences of frost damage to corn. If Brazil has significant damage, we could be in for a greater demand market from U.S. crop. They also did not understand why everyone is fussing about increased temperatures this time of year as corn needs this heat.
Northern Minnesota:
They are worried. They have not bought corn/soybeans in four weeks. Some are worried about what they already have on the books as the crop simply won’t be there. Spring wheat is in very rough shape (as we all know but want to reiterate). This will be a tougher year but will yield some crop. They are about 30% sold on new crop.
Northern Missouri:
The crop is looking great, and rainfall has been perfect. No concerns here.
Summary
The crops look good and just thirsty in pockets. We feel as though we heard more positive than negative outlook on crop conditions and yield estimates. There is absolutely an opportunity for high yields. The next month will probably offer some of the best opportunities to sell corn and soybeans unless this next heat wave arrives without any rainfall. If there is no rain for the next two weeks, we will start to see heightened concern in Minnesota and Iowa.
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