Last year in July, I drove from Kansas to Virginia. From Missouri, across Illinois, Indiana, Ohio and Pennsylvania the majority of corn and soybeans were about the same in growth and looked good barring some day time stress from high temperatures during the time.
About a week ago, I took off from Kansas and drove again to Virginia. It’s a long drive especially when I add miles and extra hours not driving the interstate for part of it. The differences between a year ago and this year when it comes to even growth is night and day. For most of Missouri corn looked good, in fact really good. But as I got closer to the Mississippi River, I started seeing quite noticeable differences. There was corn over 5 feet with a few fields that had tassels and corn that was knee high. There were soybean fields that were completely canopied over and fields where soybeans were a couple inches out of the ground.
From western Illinois and across most of Indiana it was pretty much like eastern Missouri but there were more fields of really bad looking soybeans and corn. Of course, not all of it was bad. Some fields looked very good. The section of Ohio that I drove, Interstate 70, actually from west of Indianapolis, Indiana through Ohio, crops looked the most even and good.
It was fairly easy to tell that the crops that were planted the soonest and got a quick emergence were doing the best. Crops planted late, and seeds that were late emerging and during the cold rains did the poorest. When I was driving, there had been some recent rains but some of the fields looked more like concrete than farm fields.
On the positive side, wheat had been mostly harvested. The fields that had straw baled had more bales on them than I had seen in years. In Illinois, I stopped and talked to a farmer harvested his last fields of wheat. It was an area where there were some of the poorest stands of corn and soybeans. When I asked what his wheat was yielding, all he said, I won’t say until I am finished, but he did say his combine counter showed very promising results.
Every year, now through late July is some of the most important times for corn and for soybeans a lot can change in August as far as yields. We saw the change in soybeans in 2012 that proves, as the saying goes, beans are made in August. At the same time, when conditions are near the bottom, it is easier to improve compared to when conditions start out the best.
It is going to be, over the next couple of weeks, hard to say if a top has been made or if prices are moving higher. As a suggestion, if buying or selling, it may be wise to us opposite options to protect against volatile moves.
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The risk of loss in trading futures and options on futures can be substantial. Each investor must carefully consider whether this type of investment is appropriate for them. Past performance is not necessarily indicative of future results.