Weekly Corn and Soybean Crop Conditions Deteriorate Further and the Latest Weather Models
Updated: 6 days ago
Update for July 28th, 2021
According to rumors, the recent price break in corn has apparently sparked the interest of Chinese buyers once again. Globally, available sources for ample corn stocks are shrinking. We’ve heard about the widespread damage in Brazil to the countries Safrinha corn crop but as more time passes the worse the crop conditions appear to be. This has prompted the world’s largest meatpacker JBS to import 30 ship loads of Argentine corn to their facilities in Brazil. JBS has not reported an exact figure but in a statement sent to Reuters the company did disclose that at this time suppliers from outside of Brazil have already supplied 25% of the corn needed for feed with volumes exceeding 1MMT. JBS said that an excellent crop in Argentina is helping to supplement current corn needs and at a more competitive price. On average, the price in the market price in Brazil is 15 to 20 Reais per bag higher than the imported corn from Argentina. This supply shift also means less competition on the global market for U.S. corn exports.
A 180-day water emergency for the Parana River was approved by the Argentine government on Monday and took effect yesterday. The river is now at historically low levels and the shallowness is limiting the amount of grain that can be transported out of seve one of the countries key ports of Rosario. The Parana originates in a drought-stricken region of Brazil and typically transports 80% of Argentina’s agriculture export shipments. The state of emergency is hitting at the peak of the corn and soybean exporting season and covers a wide portion of the Parana River Basin including the provinces of Formosa, Chaco, Corrientes, Santa Fe, Misiones and Buenos Aires. (Reuters)
Hot and dry forecasts persist for many of the driest parts of the Plains and Midwest. This week the USDA reduced their weekly crop conditions for both corn and soybeans. The GD/EX corn rating was lowered to 64% which compares to the 72% GD/EX rating for this time last year. Of particular importance was the 3% decline in GD/EX conditions in Iowa just as an extremely hot and dry week begins across the state. U.S. soybean conditions received a 2% drop to 58% rated GD/EX vs 69% a year ago. Like corn, the Iowa soybean crop also received a significant drop in the GD/EX rating this last week falling by 5% from levels the previous week. Reports indicate some new Chinese buying interest in U.S. soybeans again now as well.
During the next five weeks our U.S. soybean yield will be determined and the end results are largely influenced by weather. For more than a week a strong high- pressure system has been locked over the Corn Belt, and has been spinning rainfall off to other parts of the country. This “Dome of Doom” as some refer to it, is currently well established with little relief in sight as new forecasts out today are now showing a warmer and drier 14-day outlook than we had earlier in the week.
A heat dome occurs when the atmosphere traps hot ocean air like a lid or cap. (NOAA)
The weekly crop progress report showed a rapid deterioration of the nation’s soybean crop condition with a 2% decline in the GD/EX categories. According to the Pro Ag proprietary yield model this equates to a 0.29 bushel per acre loss or a 49.14 average. Successful Farming reports that with the projected ending stocks of 155 million bushels and current yields already 0.7 and 1.7 bushels per acre too high we could see the elimination of our entire carryout. If adverse weather conditions persist for the next 5 weeks it is feasible we could lose an additional 27 million bushels each week. If the current 14-day forecast is accurate, it is very possible we will see a lose of 50 million bushels of soybean yield which Successful Farming believes could signal considerably higher prices.
It’s also important to consider the current soil moisture levels our crops have left to work with. Just during this past week the topsoil moisture declined by 5% and the subsoil by 2%, the reserves are almost depleted. So now we are left to wonder if the weather pattern that has been nearly constant all summer (hot and dry in the northwest Corn Belt and cool and wet everywhere else) is changing a bit as now the hot and dry outlook is centered in the middle of the Corn Belt.
Since the drought of 2012 there have been many comparisons made between the conditions that existed during the “Dust Bowl” of the 1930’s and those present now. The actual Dust Bowl came in three waves during the years of 1934, 1936 and 1939-1940. (Some areas of the High Plains underwent severe drought conditions for as many as 8 years) The severe soil erosion that occurred during the 1930’s event was the result of a failure to apply dryland farming practices (which left the topsoil very loose and vulnerable to wind erosion) made worse by the widespread, ongoing drought. What is startling to learn though is that the current drought in the Western U.S. has now outlasted the Dust Bowl of the 1930’s and has dropped water reserves at 2 of countries largest reservoirs to dangerously low levels. “And worst of all, the drought blanketing the western United States is not going away.” (Scientific American)
The following map shows where the Dust Bowl of the 1930’s occurred and the various levels of destruction it caused.
The Storm Prediction Center has released a forecast for later tonight and through the overnight that calls for the potential of powerful thunderstorms that are capable of producing tornadoes and damaging winds, possibly even a derecho. The current forecast maps from the SPC are included below.