September 9, 2009

Weather forecasts remained benign for the US corn and soy crops over the Labour Day weekend and a frost remains unlikely until late September at the earliest, meteorologists said Tuesday (Sept 8).

 

The issue is crucial for the corn and soy markets, due to late developing crops that could take a significant hit from an early frost this year, analysts said. As of now the weather is bearish.

 

"The outlook for the next two weeks or so does not hold any chances for a freeze where things are grown in the Midwest," said John Dee, president of Global Weather Monitoring.

 

Dee cautioned, however, that "you get beyond day seven or eight and the forecast becomes a little more subject to change."

 

Drew Lerner, owner of World Weather Inc., also sees no frost threat in the two-week forecast, and says warm temperatures with some rain in the next week in the Midwest will be followed by a second week of warm, dry weather. Both meteorologists said the rain would not be excessive enough to cause major problems for the crop.

 

Lerner said beyond that, however, the Midwest will likely see a cold snap at the end of September and into early October.

 

"It will be cool enough that the market will be scared," Lerner said. "This far in advance, I'm not going to say there will be a frost or freeze event."

 

Some analysts have said that beyond the two-week period, a frost might not cause much of a reduction in corn and soy yields. Both meteorologists agreed, particularly if the freeze was limited to northern states such as Iowa, Minnesota and the Dakotas.

 

"I think if you went deeper and deeper south into Illinois and Indiana, two weeks from now, there still might be some areas that are not ready yet," Dee said. "But for a big chunk of corn and beans in the Midwest - two weeks from now, you're not going to be damaging a big chunk of the crop, like if you had something happen tonight."

 

Lerner said some of the crop is clearly vulnerable, but that "I can't get too excited about a major production cut."

 

An early frost in many areas, particularly in the north, would be more of a threat to the quality than the quantity, he said.

 

Although the forecasts show the crop could almost be in the clear for this year, Don Roose, president of US Commodities in Des Moines, said there's still reason for caution.

 

"I've been at this long enough to know it seems that's the case, then you walk in tomorrow and all the maps have changed and you go 'whoa', Roose said.