WEATHER is starting to become a real concern for grain producers.
After an extremely wet spring that delayed planting, Corn Belt producers — among others — haven't gotten nearly the precipitation they had hoped for over the past 60 days.
One of the key problems with wet springs followed by dry summers is the lack of root development of the crops. Plenty of water early in the growing season means the plant doesn't have to work terribly hard to obtain moisture, but shallow roots when water is scarce in a dry summer can then lead to a variety of problems.
Unfortunately, that may be the case in many parts of the country now.
The latest maps from the National Weather Service show that significant parts of Iowa, Minnesota and the eastern Dakotas have received as little as 25% of the amount of rainfall seen in a typical year, with Wisconsin, Illinois and Indiana each showing precipitation well below 75% of normal (Maps).
Indeed, in its weekly update of crop conditions, the U.S. Department of Agriculture noted a two to three percentage point decline in the good-to-excellent ratings for both corn and soybeans, reflecting the relative dearth of rainfall.
On an industry crop tour last week, field scouts from Ohio to Nebraska noted considerable variability in crop maturity and condition, with corn in southern Minnesota reportedly still being at least 45 days from physiological maturity.
Given the immature condition of crops in most states visited by the tour, pegging yields was more of a challenge, but yields were generally described as "underwhelming" the farther west scouts progressed.
Meteorologist Drew Lerner at World Weather Inc. wrote earlier in the month that 2013 is setting up to be a year in which producers need to be mindful of early frost and freeze potential.
"There is potential for notable crop production cuts in a seasonably normal frost and freeze event, let alone one that is earlier than usual," he said.
Lerner explained that he has been concerned about the possibility of an early frost since observing a daily low temperature of 39 degrees F at Bismarck, N.D., on July 26.
He said weather patterns throughout the summer months have not allowed for a typical "warm-up," which, coupled with arctic ice accumulations running ahead of recent years, creates the threat of frost or freeze in September.
Despite those fears, the market is still expecting a record soybean crop, according to the latest survey conducted by Thompson Reuters. In an Aug. 22 update, the news service reported a range of analysts' predictions from 92.50 to 95.26 million metric tons for the late crop.
Such a harvest would come in above the current USDA forecast, revised earlier this month to only 88.6 mmt.
Weather concerns have largely driven the markets over the past two weeks. Heading into last Friday's pit session, corn and soybeans appeared to be moving higher for a second consecutive week.
Perhaps further illustrating the problem, the Farm Progress Show pre-emptively cancelled most of its field demonstrations due to a lack of crop maturity — marking the first time in 60 years show organizers will be unable to harvest crops during the event.