No matter what else happens, every day that passes puts the market a day closer to harvest.
“We’re marching to a crop daily,” says Don Roose, president of U.S. Commodities in West Des Moines, Iowa. “And as we go we’re measuring the size of that crop.”
But hot weather and a lack of rain in some areas has meant a market that is marching toward harvest has still been choppy and sometimes difficult to predict. The Eastern Corn Belt has seen moisture all season while the Western Corn Belt has been dry. Right now, Illinois is looking relatively good while Nebraska and Kansas are very dry. Iowa is somewhere in the middle with parts of the state having plenty of moisture while other parts are battling heat and drought.
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And there are still issues overseas. There is still a drought and a heat wave in Europe. There are still many questions about how much Ukraine will produce this year and how much of what it does product can be shipped out. Of course, Russian production and that of other Black Sea nations is intertwined with the Ukraine war.
Most farmers are now watching the weather and starting their preparations for the fall harvest. Roose says there has been interest in marketing tools such as three-way window contracts this summer. And he says marketing has been made more difficult by prices hovering close to the crop insurance rate.
Many farmers have stuck to the idea of having roughly a third of the crop marketed by now, and they are watching the weather and the market as they try to fine-tune their marketing plans. That’s not a bad strategy. But he says the key right now is to simply use good risk-management strategies and to pay attention to the messages the market is trying to send.
This is the time for good risk management and for the fine-tuning of market plans, he says.