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Grain Update: Aug. 30, 1996



Grain Supply Update: August 30, 1996

		          Well, Hello, Dolly!

			© Geri Guidetti, 1996

Though every cloud purportedly has a silver lining, farmers across 
southern Texas might be more inclined to argue that Hurricane Dolly’s  
were lined with liquid gold.  Remnant moisture that fell from the 
northern fringe of the hurricane that hit eastern Mexico last week more 
than doubled the year-to-date rainfall in that part of the 
drought-stricken state.  Soil moisture improved enough in some areas to 
raise hopes for the planting of Fall crops.  Though cities such as San 
Antonio had received a mere 31% of their normal annual rainfall before 
the tropical moisture arrived, this week’s heavy downpours boosted 
farmers’ and ranchers’ spirits.  More would be nice — very  nice.  The 
drought in large parts of the Southwest is now in its eleventh month, 
and it will take a lot more than Dolly to end it. 

Eduard, in the meantime, is a very dangerous hurricane lurking, at this 
hour, about 600 miles away  from the outer banks of North Carolina.  A 
category four on a scale that tops out at five, Eduard is already being 
compared by some meteorologists to the infamous Hurricane Andrew that 
destroyed Southern Florida a few years ago.  In the past 48 hours, its 
winds have been sustained at between 130-145 mph. Why is this important 
to the grain picture?  Computer models projecting Eduard’s path range 
>from  a northward track, which would mercifully spare the Eastern U.S., 
to a more west-northwest trajectory which would bring it dangerously 
close to the Mid-Atlantic and North East.  As national grain stockpiles 
dwindle to all-time lows, these regions have been agricultural bright 
spots this season.  The corn crop here in Maryland, for instance, looks 
magnificent.  The path Eduard --or his younger sister, Hurricane Fran -- 
take this weekend and next week may prove to be decisive for crops 
nearing maturity.  This is a year in which  every state’s harvest 
counts.

Corn and soybean futures prices continued to rise this week as a private 
agricultural consulting firm, Pro Farmer, estimated that the nation’s 
corn yields would be 500 million bushels lower than the USDA’s estimate 
released last week.  It should be noted, however, that Pro Farmer has a 
history of understating crop yields. (Favors higher prices that are 
pro-farmer.)  Not only had the USDA’s latest corn crop condition rating 
shown some deterioration, but, once again, there was concern that an 
early or normal arrival of Fall frost would not allow the late-planted 
crop to mature in the important Midwestern corn belt.  Normal killing 
frosts arrive in this region early to mid-October.  They need to come 
later this year to get a usable crop. If correct, predictions for a warm 
Labor Day weekend could improve crop progress this week and improve the 
odds.

The international wheat scene improved so much this week that prices for 
wheat futures fell amid speculation that global supplies might rise.  
Canada is expecting a bumper crop, and weather conditions in the former 
Soviet Union, Europe and parts of Australia  have brightened the outlook 
there. If they should materialize, foreign wheat harvests may take some 
pressure off  U.S. grain markets and help to moderate prices.  We could 
certainly use some good news… Geri Guidetti, The Ark Institute
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