“Cold Snap Could Harm Crops”
According to an agricultural meteorologist and the National Weather Service, the first snow and a cold snap may have negative effects on late –maturing corn and soybeans crops and delay the harvest.
For farmers who are harvesting soybean and corn crops in northeastern North Dakota and northwestern Minnesota, the first snowfall and a cold snap have become after a devastating summer drought.
These two regions are main largest producers of soybean and corn crops in USA.
USDA on Monday said,”54 percent of the corn crop had been harvested, up from the 20 percent five-year average, and 41 percent of the soybean crop was harvested above the 19 percent five-year average.”
However, it is expected that there will be downsides of the first cold that will slow down the harvest. The crop regions are expecting the dropping temperatures below normal early Sunday and Monday mornings and also, it is said that the light rains late next week will cause slowdowns in harvest of US corn and soybean crops.
In the light of this expectation, there may be speculations in corn and soybean prices.
In addition to the weather forecast, there will be USDA’s monthly crop report on October 11.
“Decline in Canada’s canola crop impacts on oilseed markets”
On Friday, the Chicago Board of Trade November soy rose 0.3% to $15.56 a bushel because Statistics Canada said, “the canola harvest was much smaller than farmers expected and well below last year’s production, which could shift some of the demand for the oilseed to US soybeans. Canola production will be 13.36 million tons in 2012/13, down 2 million tons from the government agency’s Aug. 22 estimate of 15.4 million tons and below last year’s harvest of 14.5 million tons.”
In other words, due to the reduction of the Canola harvest volumes caused the by unpleasant weather, on Friday there was the price spikes in November soybeans. Therefore, it is expected a higher price in a soybean market because of the demand for soybeans (they are substitutes) as result of the reduction of Canola production.
References:
http://www.weather.com/news/drought/crops-cold-snap-20121005
http://en.mercopress.com/2012/10/05/decline-in-canada-s-canola-crop-impacts-on-oilseed-markets
http://www.grainews.ca/news/u-s-soybeans-rally-on-damage-to-canola-crop/1001744212/
Hi Gulsana! I think this is my first time to write comment. I like how you carefully write about the effect of weather on corn supply. I think you have precise report of whether forecast day by day. I agree that depending on weather, corn price will be fluctuated a lot. I wrote in my blog that this week weather allows farmers to yield good harvesting due to light rain. After reading your blog, I think I also need to think about disadvantage of the weather. Like what you say, light rain could good news after severe drought. Simultaneously, it causes harvest to be slow. Do you think we can say in general corn supply increases? That is what I predict this week.
I found that you mention about USDA’s Crop Production released next week. I would like share my idea. I expect that future prices are going to fluctuate greater when USDA reports Crop Production next week. I assume that if traders know about crop level, they could make a large contract or many times of small contracts. And these contracts make price up and down
Lastly, I would like to introduce http://farmfutures.com/main.aspx website. I found it is quite useful to see big picture of market. When it comes to commentary in the website, this gives some kind of tips of how to analyze world market.
and enjoy the long weekend!^_^
Hi Elly! Thanks for the comment.
I agree that there will be volatility in market because of speculation before the USDA’a monthly crop report.
And, thanks for sharing information and sources.
Have a nice weekend!