Memorial Day Suprise!
In April, it looked as though the corn belt was out of the drought and things were positioned for a big crop. Planting conditions were good, and the corn futures market reacted accordingly by collapsing to $4.90. Contrary, Kansas was still experiencing an extended drought and the drop in prices made things look very bleak locally for spring crops margins.
In retrospect, weather has played a big role in turning the markets around over the last couple weeks. However, not quite like everybody thought. Illinois and Iowa have not gotten any significant rainfall. In addition, there is nothing in the immediate forecast. Slowly corn has started moving back up over the last two weeks. The 181.5 bushels per acre average that the USDA was forecasting is starting to look questionable now.
In northwest Kansas, many farmers have received timely rains that have allowed them to get their spring crops in and through the germination phase. Limited rainfall is only a Band-Aid, with the lack of subsoil moisture. However, increased precipitation and a nice bubble in the market sure do you make things look and feel better in Kansas.
As they say, the mob is fickle, and so are commodity markets. We have to remember the corn planting conditions we're outstanding, and the potential for that crop is still there. Crop conditions and weather forecasts look to continue to play a role in the markets. However, we have a long way to go.