Hot, dry weather in crop-growing regions of the U.S. is starting to sap the earlier optimism about prospects for a bumper grain crop.
The continuation of hot, dry weather isn’t only a factor for the Northern Plains states; we’re also seeing such conditions in the eastern Corn Belt. The result is that the corn and soybean markets have begun to reflect those worries and are trading higher.
Perhaps more important than the current weather is that the short-term weather forecast going out two weeks shows no sign of any significant relief. Because the crops are hitting some crucial growth stages, the threat to downgrade the crop is real.
In fact, the futures market saw new-crop corn trade at its highest levels in nine months this week. And any significant downward revision in crop estimates is expected to have a negative impact on the feeder and calf market as well.
This year perhaps more than most, the conventional wisdom early on was that we had record acreage and very good planting conditions. Thus, most feedyards are not as far out in front of the corn market as they traditionally have been. Spring came early this year in much of the country, and the weather pattern continues to appear to be running 40-45 days early, with record temperatures across a good portion of the country.
Along those lines, the West is shaping up to have its worst fire season in years. But, as one expert in Colorado said this week, at least there isn’t much fuel. From a grass and undergrowth standpoint, that’s true, but the trees ravaged by the beetle bugs in many forests are likened by some to tinder boxes.