Southwest of Storm Lake

Crop Conditions as of 12-16-20

Past Weeks Rainfall Dry with a skiff of snow.
Soil Moisture Iowa Climatologist reported at end of November that 71% of western Iowa is short to very short on topsoil moisture and 90% short to very short on subsoil moisture. 0% was surplus.
Temperature Typical for mid-December. Highs upper 20’s to low 40’s, lows from low teens to upper 20’s.
Crop Progress Early harvest this year with dry gain moistures.

Corn

Soybeans

Crop Stage Much fall work has been completed with a long open fall season after harvest. Crop Stage
Yield Potential Yields were good but down from recent years. Little to no drying costs certainly help. Yield Potential  Same as corn, good yields but mostly lower than past   several years.

Corn Market

Soybean Market

Current Prices  $4.07 Current Prices  $11.31
October  $3.73 Fall Price  $9.88
Past Weeks Trend Corn has gained about $1.40/bu since early August. Past Weeks Trend Beans have gained almost $2.50/bu since June 1.

Comments

Strong export demand, a weaker dollar, tight inventories in China at a time they are rebuilding their hog herd, and a slightly reduced US crop have all factored to push corn and soybean prices to their highest levels since 2014. Corn did have a few weeks over $4.00 in June/July of 2018, but that’s been it in the past 6 years. The tough part is that for months during mid-year, prices dwelt in the bottom side of the six-year price range as early-planted crops sprinted to a mid-season high point in crop conditions. However, the expanding drought beginning in west-central Iowa was starting to take its toll while the other factors (plus widespread derecho all conspired to start pushing prices higher. Many bushels were sold at lower price levels. When one has not had $10 beans in years, it is easy to sell many to most bushels at such a price. When the crops leave farmer’s control, that’s usually when prices really takeoff. We watch the weekly Commitment of Traders report, in particular the Managed Money column. When they exceed ownership of 200,000 contracts, that’s pretty bullish and maybe ripe for a pullback sometime soon. They’ve exceeded that for weeks now, but all trade indications are pretty favorable. South America remains dry in key growing areas, so China may not have a substantial an alternative for US beans as they normally would.

Land sale results have been stronger on good land. Reasonable crop yields, improving crop prices, government stimulus payments, and lower interest rates have all helped to add some to land values. Farm income will be pretty respectable in 2020.

Dennis Reyman, AFM, ARA

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