Market analyst: Late frost, wet fields
09/24/19 — North Dakota and northern Minnesota now officially will have a late frost in 2019 (and likely South Dakota), as we’ve already surpassed the normal frost date in most areas with at least another week of warm weather forecast. That will help crops mature, or at least get closer to maturity, but we’ve developed some other problems recently with the heavy rains in the northern 2/3 of North Dakota over the weekend. One big concern on farmers’ minds in these wet areas in the Upper Midwest is how to harvest in such soggy conditions. For many, it will be a difficult harvest.
Recent warm weather has been a Godsend for most farmers, though, helping crops to push closer to maturity and avoid a potential disaster from an early frost. Weather forecasts are cooling considerably for the 8-14 day forecast, likely bringing the first frost to many northern areas in early October. But actually that will be at least a week later than normal in the far northern Corn Belt as the average frost date, for example, in Fargo, N.D., is Sept. 23 (yesterday). Many already are guaranteed a late frost date as areas north of Fargo are already in that category, with at least another week of warm weather forecast. Temp forecasts are still above normal for the next week in just about all the Corn Belt, before cooler, more normal weather moves in from the west. Precip amounts are forecast to be above normal in the Corn Belt proper over the next week. While the colder weather will likely bring the first frost in northern areas like North Dakota, more important to the market are states like Illinois, Indiana, and Ohio where planting was extremely late and the average frost date is October. Even an average frost will hurt crops there as it will any extremely late planted crop. And there was plenty of it in states like South Dakota, Illinois, Indiana, and Ohio. Even in North Dakota, if it freezes a week or more late in some areas, some crop is so late in development (due to late planting, soggy soils much of the year, or both) that it will suffer some loss in yield as a result.
Many of these states are already saturated, with some heavy rains recently such as the 4-6” that fell last weekend in much of the northern two-thirds of North Dakota (washing out roads in its wake), or the 8.5” the past three weeks in most of central Minnesota. These areas are now going to have difficulty harvesting fall crops as ground is saturated and will have difficulty supporting heavy equipment. This wet environment has persisted for over a year in states like Wisconsin, where heavy losses were incurred last year at harvest as well as hindering growth of crops in most of this year’s production season. In some cases, water tables have risen so much that there is standing water in low areas, so traveling the length of the field at harvest will be impossible. Ironically, just a year or two ago environmentalists were chastising irrigation as diminishing water tables to unacceptable levels. Now almost the whole state has excessive water nearly everywhere.
Crop conditions/progress reported yesterday afternoon showed an improvement in national yield potential for corn (+2 bu/acre) and soybeans (+.15 bu/acre). Corn conditions improved 2% to 57% good/excellent, still below last year’s 69% G/E rating. The Pro Ag yield model is at 175.4 bu/acre, now well above ‘trend’ which is surprising considering the difficulty we had early this year. But the corn yield model has risen nearly 12 bu/acre from the low point on June 24, so after a horrible spring things have improved. However, we still doubt that the late maturity of crops is fully considered in the yield model (which doesn’t take into consideration things like planting lower yielding, earlier maturing varieties late). Soybean conditions were unchanged at 54% rated G/E, but the yield model rose slightly anyway. Maturity is moving along due to the very warm weather last week in the entire Corn Belt, with soybeans dropping leaves at 34% (up 19%) but still behind normal by 25%. Corn in the dough stage is 96%, 4% behind normal (that 4% likely won’t mature, and may not even get close). Corn is 79% dented (15% behind normal), but once corn is dented at least there is something to harvest. Corn is 29% mature (28% behind normal), and 7% harvested (4% behind normal).
The one crop ahead of normal development is cotton, with 11% harvested (equal to normal), and 64% bolls opening (7% ahead), but conditions did drop 2% this week to 39% rated G/E (now the same as last year). Sorghum is 90% coloring (equal to normal), and 42% mature (11% behind normal), and 26% harvested (5% behind). Sugarbeets are 11% harvested (2% behind normal), with winter wheat 22% planted (2% behind). HRS wheat is 87% harvested (10% behind normal), but that last 13% will be very poor quality as even before recent heavy rains the quality was poor. We note HRS wheat prices are up sharply recently on that news. Oat harvest is 96% complete (3% behind), and barley 92% harvested (7% behind). Soil moisture levels nationwide are below last year’s soggy rating, but northern areas are very wet for this time of year.
News is spreading that pork prices are on the rise worldwide now that China has begun a campaign of buying meat from all around the world. In China pork prices are up 50% this year, and all around the world pork prices in major export markets are up from 10-50%. That is also pushing beef and poultry prices up around the world, too. Thoughts are that as China continues to buy from mostly non-U.S. sources that U.S. prices eventually will see a rise as well due to shortages developed around the world. Perhaps that is why U.S. meat prices have become so erratic in price movements recently.