The latest crop condition estimates are the lowest since 2013 (corn down 2% and beans down 4%). Also, time is running out for the western half of Iowa to get enough rain to produce average corn yields. Forecasts shift every six hours, which contributes to farmer and market uncertainties. This week it rained in the eastern corn belt, but the west continues to struggle with heat and dryness.
These uncertainties are convincing more and more farmers that crops are all but loss, causing people to think “corn HAS to rally to $4.25-$4.50.”
It seems like a lot of people are on the same side in their thinking. This makes me nervous. So, I caution farmers to take a step back and also consider the following:
- Rumors and threats of drought happen every year
- Realistically, the market already knows that 25% of the Corn Belt is suffering from dry weather. It’s estimating a 165 national yield with $3.90 Dec corn.