Markets watching weather, acreage
WATSEKA – Potential acreage changes, the weather and the August USDA report are all factors which could impact the markets.
Weather headlines are already catching the attention of traders and that led to higher corn prices this week. There is a heat wave threat for the Plains and Western Corn Belt with models showing a major heat dome reaching Nebraska and Missouri July 16-23.
Merrill Crowley with Midwest Market Solutions notes there was a 24 percent yield reduction in the wet year of 1993 and a 17-18 percent reduction in the dry season of 2012. Crowley says a 20 percent reduction in our yields from last year would put us at 140.
“There would be some serious price increases on that,” Crowley told The Central Illinois Farm Network.
University of Illinois ag economist Gary Schnitkey estimates the current corn prevent plant acres at 8 million which represents 8.7 percent of this year’s planted acreage. Soybean prevent plant acreage is estimated at 3 million which is 3.8 percent. Even though prevent plant acres seem large, they only represent a small percentage of the total crop.
“If these acres were to be confirmed, they would represent a decrease of 1.3 billion bushels of corn and 146 million bushels of soybeans,” Crowley added.
Crowley can be reached at his Watseka office: 815-432-2220.