Midwest drought spikes corn prices; Best week of summer for MN?

52.56% of the Midwest now in moderate to extreme drought

41.2% – spike in corn prices in past several weeks on drought concerns

Next 2 weeks – critical period for crop development & yield

“Vowel States” – Iowa, Illinois, Indiana and Ohio hardest hit by drought

1″ to 2″ rains? NAM model hinting at 1-2″ of rain near Indianapolis Friday?

Toasty but comfy - Winning summer weather streak for MN this week

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Source: U.S, Drought Monitor

Deepening drought sends corn prices soaring:

So you want to play the commodities markets huh?

The worst Midwest drought since the infamous summer of 1988 has sent corn prices soaring in the past few weeks.

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Source: USA Today

The hardest hit areas are the so called “vowel states” from Iowa to Ohio in the southern Midwest. The latest U.S. Drought Monitor shows 52.56% of the Midwest in drought overall, but the Upper Midwest has seen ample rains this summer…while deep drought is locked into the Ohio Valley states.

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Source: U.S. Drought Monitor

Check out the percentage of “drought conditions” in the so called “vowel states” which are a major part of the overall corn belt.

-Iowa 44.92%

-Illinois 92.05%

-Indiana 89.02%

-Ohio 65.62%

I’ve talked with some agricultural insiders in the past week about the growing drought.

My sources tell me that even though the Upper Midwest (Dakotas, Minnesota & Wisconsin) may produce bumper corn crops, the production in those states cannot make up for huge yield losses in the so called “vowel states” in the southern corn belt.

Think weather forecasts aren’t important to commodities markets?

I’ve been on the trading floors in Chicago as grain prices are set and traders scurry to get the edge. I’ve seen trading activity come to a screeching halt on the floor while my then WGN colleague Tom Skilling delivers his midday weathercast on WGN TV as it’s piped onto the trading floor.

The rapid onset of drought conditions is a big change from forecasts just 2 months ago that hinted at a possible record corn crop this year.

Some rain on the way?

Markets dipped a bit Tuesday on forecast of potential rain in the southern Midwest.

An upper level disturbance spinning through the Ohio Valley may set off some scattered to numerous thunderstorms late this week.

One model (the NAM) is cranking out anywhere from 1″ to 2″ rainfall around Indianapolis, with some heavier multi-inch rainfall totals further south.

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Source: Iowa State University

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Source: NOAA/HPC

Will it be enough to save part of the withering corn crop in Indiana? Time will tell.

Best week of summer in Minnesota?

After last week’s “heat attack” you can make a good case that this week’s weather is about the best of summer so far.

With highs in the upper 80s the past few days, plenty of sun and comfy dew points in the 40s & 50s this weather is hard to beat. Watching my son pitch his first complete game last night (an 8-5 victory) in light breezes and 80 degree temps as the sun set on ripening cornfields west of the metro was simply amazing.

Temps will ramp up to near 90 the next few days, but humidity levels will remain comfortable until Friday and the weekend, when dew points will rise into the sticky 60s.

Look for a run on sandals, sunscreen and root beer floats as we head into the weekend.

PH

  • Randy in Champliln

    I hope the nam model is right in that some area’s could see some beneficial rainfall…I’m afraid of one thing however, with that kind of rainfall expected, what are the chances of wind and hail?, a very fragile crop could totally be laid to waste with hail and high winds.