It is the 15th of July and a 98% chance that your corn looks great today. If it doesn’t you have a problem. Sins of the crop are quick to disappear as bright green color and dynamic growth places visions of (mega yields) in farmers minds. In a wet year such as this one that color can remain vibrant a long- long time. In a dry year the grey caste can signal issues in early to mid- August. This year corn went into the ground much earlier than normal and much easier than normal so we would expect that helps this July 15th visual crop to be on the verge of “spectacular”.
We are tasseling in a lot of places but to the north and west we don’t usually see tassels on the 15th of July, two weeks later maybe. But Nebraska is an example of why timing is so important – – – the earlier you can tassel the less the pollination risk. With many irrigation systems not even cranked up yet in that part of the world it is no wonder record corn yields are starting to permeate farmers thinking. And with water restrictions it is also important not to crank up too early in a state where nearly 70% of the corn is irrigated. Minnesota and South Dakota are also voicing record yield potential as is the northern ½ of Iowa. So we do have corn bears in spades in three out of five of our high quality soils and high potential production states.
We have other reasons for bears to start to surface. Wheat is starting to compete aggressively in cattle country mainly because of quality discounts, but the numbers are not staggering just yet. World corn prices continue to be a concern to the bull as the northern Brazil ports are kicking in with offers that are capturing business and expanding ideas about what U.S. imports from South America will be. Weather traders have turned negative because heat will create plant growth and for sure cover the crops sins, but too much heat can create too much buying from too many folks if that heat would intensify? And let us not forget the warm temps in Europe and in Canada and El Nino in Australia that will also appear on traders daily watch list.
Maybe the latest issue for corn traders to analyze is the dollar resurgence. This would be a new high close for the upside move today and whether you want to blame Greece or Iran for the strength really doesn‘t matter. Fact is, corn is more susceptible to competition with a strong dollar where the big soybean buyer is not particularly concerned about dollar strength. Maybe most important is the attitude that it is time for a break maybe just because the market is unable to hold strength. Long term technicals continue to feature bullish attitudes but summer markets are short term markets many times until somebody is motivated to buy something. Weather markets give lots of thrills so don’t be too hard on yourself for not being in the right place at the right time. In a world that has been and continues to be bearish on commodities the agricultural markets have stood above the rest over the last three weeks. Those sellers may try to check in also if corn cannot hold key areas.
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