For the first time in a long time, corn has had days as the leading grain on the Chicago Board of Trade.
That is to say, some days the gains in corn were more than the gains in wheat or soybeans. Some days, the beans matched the corn, but with a higher-priced commodity where the gain was not as great a percentage of the price.
In the process, corn has bounced 20 cents off the bottom created when USDA “found” 3 million acres more planted corn.
That is the good news. The bad news is that December corn futures are still under 3.35 after a high over 4.73 in early June.
That high marked a technical retracement to the high or 4.71 3/4 made the first trading day of the year. So, we are more than $1.35 off the high, and there is nothing on the horizon to made us think we are going back there.
Inputs still high
The current price is a shock to the farmers that are still paying off input costs that were run up in the acreage rally fed by ethanol demand.
As fertilizer and seed increased exponentially in price, we had one good year to sell corn, and that was marked by grain companies that were limited by margin requirements in forward contracting. So, the good prices did not get locked in, but the high inputs are still hanging around.
I ran into Doug Stiles of Western Reserve in Andover recently. He and I shared office space in the ancient past when we both worked in Jefferson.
I asked him, “Doug, am I crazy, or do I remember buying $62 potash?”
He agreed that was the price back in what now seems like the dark ages.
Chilly
When farmers call these days, it is to talk about how cool it has been and to sell a little corn they wish they had sold earlier.
The cool weather is becoming the talk of the Midwest, with something like 3000 reporting stations in the U.S. reporting the lowest average temperature on record.
You will notice that the climate talkers are now talking about climate change and not global warming. Now any variation from the norm is our fault.
It is noteworthy that corn progress is not much behind normal locally, even given the cool weather. I credit the warm May for this. I can remember planting corn in the end of April and not seeing it until the first of June. This year, it was knee high the first of June.
It has just been slow since then.
It has been slow to grow out of the hail damage we had locally a month ago near state Routes 11 and 322 in southern Ashtabula County.
Millers’ corn is growing out of it and is not showing the damage, although it will show in the bin. Coltmans’ corn was not hit as hard, and it is looking almost normal.
The beans are another issue. Bob Wood’s beans are not growing out of the damage, and Millers’ may never fill the rows out. It is ugly to watch.
Will August heat up?
We are near August now. If we fire up some heat, we will have good crops. If we stay cool, the crops will be smaller, though not as much as one would think.
The lack of heat is eliminating the acres that are hurt by hot weather nearly every year, so the average is not lowered as much as one might expect.
The market will start to get sensitive to weather in September. The agronomists will be walking fields looking for black layer. Traders will worry about an early frost to hurt the late corn.
The market is a disappointment, but the biggest disappointment is always a small crop. Cross your fingers.
