Corn and soybean crops look to make it to the end

by Ron Sterk
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KANSAS CITY — A frost scare last week in the Midwest failed to materialize, and another forecast for frost was on tap for late this week. But it appears most of this year’s late-developing corn and soybean crops will make it to harvest unscathed in the major Corn Belt producing region.

Still, some millers have expressed concern about milling quality in areas where the corn crop is significantly behind average maturity. Most concerns are for the crop East of the Mississippi river, especially in Illinois, the nation’s second largest corn growing state.

Farmers, anxious to get the late crop out of the field to avoid any adverse fall weather, may be tempted to harvest corn before the moisture content adequately drops, millers said. The corn then would have to be dried before it could be ground. Milling quality concerns focused on difficulty producing larger flaking grits used mostly by cold cereal manufacturers. Corn millers experienced similar problems with last year’s late harvested crop, and this year’s crop is even later.

The corn crop in the 18 largest growing states was only 21% mature as of Sept. 20, behind 30% last year and well back of 55% as the 2004-08 average for the date, the U.S. Department of Agriculture said in its Sept. 21 Weekly Crop Progress report. The 34 percentage point gap between the Sept. 20 figure and the average equates to at least two weeks and as much as four weeks delay in harvest, sources indicated.

Of the five largest corn producing states, only Iowa, the largest, beat the 18-state average with maturity at 22%, still far behind its own five-year average of 55%. Maturity in the other four states, in order of production, was 13% in Illinois (69% as the average), 15% in Nebraska (44%), 4% in Minnesota (40%) and 14% in Indiana (57%).

The soybean crop is faring somewhat better. As of Sept. 20 the U.S.D.A. indicated 40% of the crop was dropping leaves in the 18 major soybean growing states, about even with 41% last year but still behind 58% as the prior five-year average for the date. Again the laggard was Illinois at 20% compared with 56% as the average. In top-producing Iowa the crop was 50% dropping leaves, only 14 percentage points behind the average.

The corn futures market in Chicago erupted with gains of about 30c a bu, or 10%, on Sept. 15 when meteorologists forecast a frost/freeze would dip into the heart of the Corn Belt a week later (around Sept. 22-23). But then forecasters said weather models changed the next day (Sept. 16), so they withdrew their frost/freeze forecasts and corn futures prices fell about 20c a bu in subsequent days that week. Soybean futures had price moves similar to those of corn.

Last week new forecasts were made, again calling for frost or even freezing temperatures in parts of the Corn Belt for late this week. Corn futures prices jumped about 15c a bu, or 5%, at midweek.

"The northern edge of the Corn Belt could see some freezing temperatures the weekend of Oct. 3-4," said David Salmon, owner of Weather Derivatives of Belton, Mo. A freeze most likely may occur across the northern tier of states, from Montana through Wisconsin, he said, but not as far south as Iowa or Illinois.

Mr. Salmon noted that the Sept. 15 forecast was made when soil temperatures still were warm enough to offset much of the colder air.

"But now soil temperatures have cooled," he said.

The average first frost date is near Oct. 10 for northern Iowa and Oct. 15-20 near the Missouri border, Mr. Salmon said.

But even if the forecasts do come to pass this week, trade sources in the country suggest little actual adverse effect on the bulk of the corn crop and little if any on the soybean crop, despite the volatility the weather has infused into the futures markets.

"We’re in the home stretch," one Midwest soybean processor said. "It would only affect a minor part of the crop. It’s not a game changer."

Additionally, Mr. Salmon said he does not see any weather detrimental to fall harvest in the Corn Belt in the next few weeks that would reduce production from the 12,955 million bus of corn and the 3,245 million bus of soybeans forecast by the U.S.D.A. in September.

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