Home Farm Equipment Anticipating drought | Farm Progress

Anticipating drought | Farm Progress


New crop gross sales had been the subject of my March and April columns and, like a canine with a bone, I received’t let this factor go.

In March, I examined years with a large previous crop/new crop inverse in futures (July/December corn). I discovered 13 comparable years and all however one 12 months (2012), corn traded decrease from early February to early October. Sturdy inverses seem to extend the chances for decrease new crop costs at harvest.

Final month, I examined 9 years since 1990 when projected soybean shares/use lack of a center floor – worth adjustments, up or down, from March to October had been larger than 10% in all however one 12 months. Regardless of a big common decline, it was not an overwhelming argument for early soybean gross sales.

How about corn? The market is worried about projected tight shares in corn and the prospects of a drought.

The next desk appears to be like at chosen years since 2000. There have been 8 years previous to this 12 months with corn shares/use projected at 5.5 weeks or much less within the April WASDE report. Of those 8 years, December new crop futures traded decrease in all however one 12 months. The 2012 drought was unimaginable, and December corn rose greater than $2/bu. (39%) from April to October. Then once more in 2004 and 2014 – years with the identical tight carryout projection as 2021 – December futures fell by 37% and 36%, respectively. BTW, in all however one 12 months (2014), the ultimate shares/use figures had been larger than projected within the April report.



The market is anticipating drought as a result of the west is burning up. Nevertheless, greater than a decade in the past, I recall a distinguished climatologist noting that Corn Belt droughts begin within the southeast, then shift west. This remark, after all, contradicts our sense that climate strikes west to east. I stay in Minnesota and if I would like tomorrow’s climate, I have a look at the Dakotas and never Wisconsin. However, I recall a chart displaying drought within the southeast previous to the 1988 drought. Only for enjoyable, go the web site (http://droughtmonitor.unl.edu/) and lookup the drought monitor map in early Could 2012. You will note the drought within the Southeast. Do you see it within the present map?

I nonetheless like pre-harvest gross sales when costs are greater than manufacturing prices. Can’t get drought out of your head? Use choices methods that set up a minimal worth.


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