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Rains key to Iowa, Minnesota corn crop and to markets

Weather is a key in the short term, said speakers at the Ag Outlook forum at the 2022 Farmfest near Morgan, Minnesota.

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Mark Schultz, analyst with Northstar Commodity, speaks Wedneday, Aug. 3, 2022, at Farmfest near Morgan, Minnesota.
Jeff Beach / Agweek
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MORGAN, Minn. — Keep an eye on Iowa.

In the short term weather market, Mark Schultz, chief analyst for Northstar Commodity, is seeing areas that part of the Corn Belt that could have biggest influence on supply and markets.

“I’d probably say right now about half of the state of Iowa is getting to a point where it’s going to need some rain in the next 10 to 15 days or we’re going to start seeing irreversible damage,” Schultz said on Wednesday, Aug. 3, at the Ag Outlook forum at Farmfest near Morgan, Minnesota.

Schultz led off a group of speakers looking at both short- and long-term issues for agriculture.

For the rest of August, Schultz said to watch the weather in the U.S. But starting in September, he said to watch the weather in South America for news that could move grain markets.

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Schultz noted that the national corn yield last year was 177 bushels per acre and that it will take a yield below 172 bushels to bring corn prices back up.

Schultz sees short-term support for the December corn at $5.65.

“If you start closing December corn below $5.65, I would not be surprised to see the market drop as low as $5.25,” Schultz said.

On the other end, he sees resistance at $6.40 and if the market can break through that, it could go up to $7 bushel.

About 60% of new crop corn already has been sold and for those who haven’t sold yet, it’s time to “start taking some of the risk off the table,” Schultz said.

Dave Nicolai, a University of Minnesota Extension educator, noted that eastern Minnesota is in a moderate drought and already being hit with a reduced crop. The forecast is for a drier than normal August, meaning that slight to moderate drought conditions will persist.

“What we’ve been holding onto is subsoil moisture,” Nicolai said. But as the corn crop matures “a lot moisture is going to be pulled out of that subsoil.”

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A field of corn in Renville County, Minnesota, on Aug. 3, 2022.
Jeff Beach / Agweek

He said another thing farmers should be looking for is corn rootworm, in large part for planning for next year if the pest is found.

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On a macroeconomic level, Berndt Nelson, a Lamoure, North Dakota, native and economist with the American Farm Bureau, noted that with some farmers already have taken advantage of higher prices and the potential for profits this year, some farmers may find themselves with some money in their pockets, which while good, but can also be dangerous.

He said farmers have to be careful not to overextend themselves, especially given the uncertainty in the global markets for commodities and inputs.

“In times of uncertainty like this, one of the best things we can do is buy cash,” Nelson said.

Reach Jeff Beach at jbeach@agweek.com or call 701-451-5651 (work) or 859-420-1177.
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