Record rainfall is sowing havoc on corn, soybean futures
‘Rain makes grain’ until proven otherwise
By William Watts
MarketWatch.com
July 30, 2015
A searing Midwestern drought can send corn and soybean futures into the stratosphere. Too much rain, however, makes for a more complicated situation.
That is the position farmers and grain traders find themselves after spring and summer rains delayed planting of both crops across the eastern half of the Corn Belt and then continued to soak the region into early July. The Corn Belt is the corn-producing region encompassing western Ohio, Indiana, Illinois, Iowa, Missouri, eastern Kansas, eastern Nebraska and southern Minnesota.
“When you have a market that’s dealing with a wet weather problem, the trade generally has much more difficulty getting its arms around the extent of that problem,” said Dale Durcholz, senior market analyst at AgriVisor in Bloomington, Ill.
The damage from hot, dry weather is readily visible. The damage from excessive moisture, however, is harder to gauge, Durcholz noted. While extremely soggy or drowned out areas can look rough, the actual impact on yields can vary from field to field—or even within the same field. And areas that receive above-normal rains but don’t suffer flooding can well above-average crops.
The struggle is evident in the price charts.
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