It’s not your imagination that the crops are struggling to get a little air. It is raining in Salem as I write this.
In Ashtabula County, we had a huge boomer in the early morning that shut off the power and dumped a couple of more inches of water on already soggy fields. We are seeing drowned spots in fields, yellow corn, and unplanted acres on some of the marginal farms that normally plant beans the first week of June.
What you are not seeing are conditions that are typical for the nation as a whole. Yes, crop conditions were down in the weekly report out after the close on Monday. But, the change was not as great as Ohio farmers might expect, because the worst state for condition declines is Ohio.
Significant declines
This is not the distinction we would like. USDA says that 71 percent of the corn crop is rated good or excellent.
That is off from 73 percent, so it is significant. It was 74 last year, so this is not a huge difference — except in Ohio.
In Ohio, the corn condition is rated just 61 percent good and excellent. That is off 19 percent in one week!
Ohio has the largest decline, so if you think the crops are looking rough, you are right. It is a similar situation in the soybeans. Some 65 percent of the nation’s beans are rated good and excellent, off two percent from last week.
Last year, however, we were at 72 percent. The Ohio crop is the worst of the major states. We declined from 69 percent good and excellent to 55 percent. In anticipation of the crop condition report, prices were sharply higher on the Chicago Board of Trade June 22, and, to an extent, for the last few days.
Prices rally
Old beans have rallied almost 70 cents since the recent low at 9.20-1/2 on May 26.
The new crop bounce is even more dramatic, taking only a week to gain almost 65 cents. The high Monday was $9.60. July corn futures gained almost 14 cents in a week, adding to the high this morning.
We are currently $3.61-1/2. As the overnight session got rolling, Monday night (June 22) prices had significant follow-through.
Both corn and beans were several cents higher. By the biscuit break on Tuesday morning, however, the follow-through was gone.
We are currently trading July corn futures up one and a half, at $3.61-1/2. The beans are actually off more than two cents, at $9.87-1/4. The challenge for Ohio farmers is to not over-react.
Looking at our crops can make us bullish. In fact, all the bullishness of this week’s report seems to already be in the market.
This is, in fact, a last gasp chance to sell beans. They should have been sold in February, but get them to town now if you still have them.
Acreage problem
Sure, we could go higher, since beans have a second problem. That is acres.
We still have only planted 90 percent of the crop in the country, and 95 percent in Ohio. We may never plant the rest.
If beans go higher, it is the second good chance to price new crop. This is hard, after taking some of last year’s crop to market at 11.50 or so on early contracts.
Those prices seem unreasonable right now. If prices go higher it is because of poor crops. Waiting for that market is betting against your own best interests.
The wheat crop is another matter. There we worry about condition, as nearly continuous rains are not good for a crop that God made originally to grow in the semi-arid regions of the world.
Bad things happen when we get too much rain late in the year. That can be disease or poor test weight, with delayed harvest. Out harvest is yet to happen, but nationally we are already behind due to heavy rains and flooding, especially in the southern Plains.
The average harvest progress for this week is 31 percent. We are at 19, up for the week from 11 percent. If the condition problems we are having in Ohio spread to other states, the corn can rally to new recent highs, which are still seven cents away.
I don’t want to see the crop that would take prices over $4. We are better off with a good crop at cheap money than a poor crop at good money.
