Is Nebraska Nearing the Point of No Return?
Searing heat hit Nebraska as the state’s corn fields started silking. Extreme heat (90 degrees Fahrenheit or higher) can desiccate silks, reduce silk fertility, and depress pollen production. The end result is poor kernel development. Just 47% of Nebraska's corn crop reached the silking stage of development last week compared to 70% during the same week in 2012 (drought year). Nebraska’s corn yields plummeted to 142 bushels per acre (bu/ac) in 2012 from 160 bu/ac in 2011. While temperatures through mid-July averaged roughly 100 degrees Fahrenheit in 2012 and 2017, slower development of corn this year and NOAA's updated outlook gives Nebraska yields a chance. Nebraska’s corn yields had no such luck in 2012 when pollination intersected squarely with low 100 degree temperature during late July. Still, we anticipate that Nebraska’s corn conditions will drop on Monday after last week's heat and urge traders to closely monitor daily temps in Gro this week.
Varying US Crop Conditions Will Drive Big Differences in US Local Cash Prices:
Crop conditions vary widely across the United States this season. Conditions are poor in parts of the western and eastern Corn Belt while crop ratings in the Upper Midwest and South look promising. Crop conditions are also varying from one county to the next in some states. This will likely result in an uneven impact on local cash prices (basis) as yield potential becomes clearer. Livestock producers in the Upper Plains could see more regional shortages than those in the South. Spring wheat conditions are poor in the West, so millers should be prepared to source accordingly. The bottom-line is that producers and processors will have to keep a close eye on county-level conditions when hedging the future this season.
A Rotten Summer for Washington’s Apples:
Washington state’s apple orchards are distressed. A deep freeze in January and dry-bone conditions this summer have hindered production in apple-growing counties. Evapotranspiration levels are currently pointing to lower yields when harvest begins in August. Dry soil conditions have also developed in the inland areas of California and Oregon. Retailers should prepare to source more product from states in the east or other countries. We suggest that wholesalers and distributors closely monitor trade flow data within Gro when setting future prices.