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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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