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ShelladyOptions
Senior Contributor

OptionEye....March 5th

Mixed open this morning on the grain floor.  We continue to trade off of weather on a daily basis.  Dry weather in the Midwest mixed with above average temperatures are driving corn higher with concern of dry soils before plantings.  Wheat and beans are on the slide as rain in the forecast is on the horizon. 

 

Corn up 3.25

 

Wheat down 2

 

Beans 1.5

 

Other factors to consider this morning is how much South American crop yields were affected by the recent dry weather.  Starting to here more of a consensus than speculation that the crop was not as damaged as previously predicted. 

 

Scott 

 

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3 Replies
GoredHusker
Senior Contributor

Re: OptionEye....March 5th

It kind of reminds me of the year 2005 when one of the I's was supposedly enduring a horrific drought.  I guess they were right as it was their fourth worst drought since records have been kept.  Fortunately for them, they also grew their third largest at the time corn crop.  For guys like me that farm in areas where an abnormally wet year would be one of if not the driest on record in the heart of the corn belt and much of the area in South America, we sometimes have a hard time wrapping our minds around damage or potential damage in those areas. 

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Tuke
Contributor

Re: OptionEye....March 5th

A lack of water when your trying to get a crop sprouted and established is a whole different animal than when it's up and has roots established. The weather has been extreme the last five years or more. Here in the corn belt it downpours in the spring and lack of rain with heat during the summer. To assume that we'll have prefect weather this year and plant large acres of corn that produce over 160bu/a seems to be a large assumption that there aren't going to be some problems along the way.
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GoredHusker
Senior Contributor

Re: OptionEye....March 5th

There were problems in 2004 and there were problems in 2009.  In fact, 2009 had a lot of problems especially in the fringe areas like the Dakotas where a lot of corn didn't get harvested until February.  There was a lot of immature corn that hit the market in 2009/10.  This is why the conversion rate for ethanol slipped then.  At this juncture, it's difficult to envision anything other than average weather.  If a problem occurs, the market will recognize it and we'll have a weather rally.  I'm reminded of 2002 when corn prices hit a big weather rally or at least a big rally at the time.  The best time to sell was at harvest.  I had a lot of friends who stored $2.75 corn at harvest only to sell if for 2 bucks in July.  In the 2001-2010 time frame according to NASS, corn yields were above trend 7 out of the 10 years.  Over the last 50 years according to NASS, corn yields have been above trend nearly 60% of the time.     

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