Summer weather extremes and downward grain prices in June

By Doug Tenney, Leist Mercantile

Last month, I volunteered some hours for my Fairfield County Master Gardener program by weeding and planting in the flower gardens at Wagnalls Memorial Library. Cindy and I had lived in the Lithopolis community for 19 years and had become familiar with the library’s programs. My dad even talked of the movies they would show at the library in his earlier years. On my workday, I observed 20 goats devouring an overgrown wooded area, fenced in by a 4-foot-high roll-up woven-wire fence with shocks powered by solar. I learned those goats could eat nearly the entire length of daylight hours, just like the length of your workdays.

Wheat harvest in central and southern Ohio was all over the board, with yields varying widely among producers. Yield reports we have seen would categorize it as a very disappointing wheat harvest this year. Central Ohio yields ranged from 10 to 100 bushels per acre, a disaster for those at the low end. One Fairfield County producer, on the first of May, recalled that this year’s wheat production potential was the best he had ever seen.

However, that broad beam of optimism quickly evaporated with the frost that hit Ohio on May 2. It is extremely common for frost to affect corn and soybean production, which can mean replanting takes place promptly. If May replanting can take place, there is potential for an above-average yield. That production potential for wheat is not realistic when damage occurs mere weeks before harvest.

In addition, if May rains set in for weeks at a time without adequate prolonged sunshine, it pushes the replanting process quickly into the first two weeks of June. It obviously means that the full yield potential has evaporated into the best hope of just an average yield. Average yields do not pay the bills, nor do they provide revenue to pay towards earlier debt.

Hang on! The weather forecast is “a changing” as we put the wraps on this column. You may have already had your air conditioning on full bore for days as you read this. As I reviewed weather forecasts for central Ohio on June 24, the temperatures high for June 30 to July 3 ranged from the mid to high 80s. Drastically, just two days later, that number changed to a range of 90-95 degrees for an even longer period, now into July 4. Rain was predicted for Ohio in the last few days of June. Those temperature extremes are not just for Ohio but for the entire Corn Belt, from east of Ohio into western Nebraska and up into the Dakotas as well.

A friend in central Illinois reports that hail was quite destructive in the last seven days of June. The reports that the damage from those storms was quite destructive to corn and soybeans in the Champaign-to-Decatur corridor in Illinois, as the damage stretched miles wide and miles long.

Not just the U.S. Corn Belt was experiencing above-normal temperatures. In the last half of June, a record heat wave hit France, as much of the country lacks air conditioning. Its residents were flocking to any body of water to beat the record heat. Unfortunately, dozens of drownings occurred as residents were seeking relief while apparently not adequately prepared for those outdoor water activities.

The Indian monsoon was disappointing this year, as adequate rainfall was not available for crop production. China has been buying huge quantities of wheat from Russia, which is having above-average production. Some are suggesting that those China wheat purchases could spill over into China corn purchases from the United States. Earlier in June, the United States sold corn to unknown destinations. Typically, that translates into China delivery. It would be a welcome sign for corn, as December CBOT corn closed at $ 4.41 on June 26, a sharp contrast to the price seen earlier this year on May 13, when it reached $5.065.

Despite the Strait of Hormuz now technically open, navigation stays highly restricted. Recent military operations have included Iranian drone strikes on commercial ships. Prior to the U.S./Iran conflict, at least 100 tankers were moving through the Strait of Hormuz every day.

Weather extremes and new demand are needed to halt the downward price trend in June for grains.

Thought for the day: “Summertime is always the best of what might be.” – Charles Bowden.