When it Rains it Pours- What is Going to Happen to The US Corn and SOybean Crops

Implications: The midwest has had exceptional amounts of rain since last December leading to major delays in the seeding and emergence of the corn and soybean crops. La Niña has been blamed for the cool wet weather, if it is disappearing what type of summer and crop will we have.

Analysis: Anyone living in the midwest can tell you it has been a wet cool spring. We have also seen my tornadoes then we would want to, with tornadoes touching down yesterday (6/7) just south of my home in south loop of Chicago. The weekly planting reports have reflected an exceptionally late rate of seeding for both the corn and soybean crops. They do not reflect the amount of fields that have needed to be reseeded because of excessive rains killing young plants or preventing seeds from even germinating.

We will get a revised estimate for supply and demand from the USDA and a revised estimate on acreage at the end of the month, though it is not unheard of the USDA to make revision with the S&D report. Given the delays in seeding, it is clear that prices are going to need to ration the supply of corn and even US soybeans. US soybeans have had an unanticipated boost by the Argentine framer strike which has pushed some shipments this spring to the US.

The La Niña cold water phenomenon in the South Pacific appears to be ending and could, according to NOAA,  be entering a neutral phase by the end of the summer. The Niña has been blamed for the wet, cool spring in the midwest, as well as excess rains in Bolivia, a shortage of rain in norther Argentina, a potentially excessively hot summer this year in Shanghai, shark attacks off the west coast of Mexico and less typhoons in Hawaii. Depending on when it ends, if it does not return after a pause of a few months, or switch into the El Niño warm water temperature phenomenon , we could have a good summer growing season, or maybe not.

What we do need is continued rains through the critical months of July and August as well as warm and not 100F + stretches of weather. We do begin with the probability of it remaining moist through the end of June, given all the moisture in the surface soils. It is also probable that we will have hot dry spells.  If we loose more yield on top of lost acreage we will see lot's of corn price records and eventually new records for soybeans surpassing to the records that were established earlier this year, as the market will need to ratio a limited supply.

Historically one could think $7 corn and $14 soybeans would do it, this year it might take $10 corn and $20 soybeans. We recently saw $25 spring wheat, so anything is possible. Be sure to have lots of sun screen for the summer and hold on to your hats if there is no rain to blow them away, as the prices will! Of course we could have a perfect summer also know as a "greenhouse" climate for the crops this summer, in which case prices could ease, but I would not expect corn and soybean prices to tumble as wheat did from its highs this year.