While the northeast is knee deep in snow after this weekend, Corn Belt farmers are hoping for any moisture to build any kind a soil profile at least get ground ready for planting. A renowned climatologist forecasts that they’ll get their wish.
Art Douglas, professor emeritus at Creighton University, said Friday that climate data from several sources indicates that precipitation levels in much of the Midwest should be “close to normal and ideal for getting into the fields” this spring.
Douglas spoke to thousands of corn end users at the annual Cattle Industry Convention NCBA Trade Show in Tampa, Fla. He said that even though a drought-threatening La Niña will linger through February, forecasts look good for a return to a normal Corn Belt growing season, except for late a spring cooling trend.
“Across the Midwest, early spring will be warm with normal to slightly above-normal precipitation,” he said. “This will support early field work. But by late spring, cooler, wetter weather may slow down late planting and early germination of the crop.”
Douglas added that “the best scenario for the summer is that La Niña conditions will not return. This holds promise that hot and dry weather will not return to the central U.S.”
He was among speakers in a convention session by CattleFax, the nation’s foremost cattle marketing consulting group. Its specialists analyze corn and other grains as much as livestock. Chad Spearman, CattleFax analyst on feed grain outlook, projected continued strong old-crop prices – even if rainfall comes.
There is support for spot corn futures prices in the $6.85-7/bu. range, he said, while there is resistance at the $7.65-7.75 level. If rainfall comes, spot futures could sink to the $4-5 range, Spearman added.
Another convention speaker, Bob Campbell, senior vice president of Farm Credit Services, Lincoln, Neb., said price volatility would reign until precipitation levels approach normal for most growers. With the entire growing season ahead, he said harvest corn prices could range from $3.85 if it’s a normal weather year, to $8.80 if 2012’s drought conditions return.
Michael Swanson, economist for Wells Fargo in Minneapolis, reminded producers that corn prices will likely follow oil prices again this year. “If oil collapses, corn prices will be forced down,” Swanson said.
Also, with current corn stocks-to-use ratio in the 5-7% range, rationing remains heavy among grain end users. “But expect that to increase to 10-12% if we see a normal weather pattern,” CattleFax’s Spearman said. “We would see cheaper corn prices.”