My Thoughts…
USDA increased the amount of planted corn and soybean acres in Iowa by about 100,000 acres from the June estimate, and increased the expected number of harvested acres by approximately 450,000 acres. This would seem to indicate that USDA does not feel that the damage from the heavy rains and flooding in early June was quite as severe as first thought. As is usually the case, time will tell the true story regarding the yield-loss impact of the flooding and heavy rains. Crop issues such as nitrogen loss, secondary crop diseases and later maturity usually do not surface until later in the growing season. Also, the 2008 USDA August crop estimates are probably a bit more iffy than in most years, given the fact that most of the 2008 corn and soybean crop remains five to 12 days behind normal development, based on accumulated growing degree units (GDUs) since May 1. Any incidence of a significant killing frost anywhere in the Midwest will likely have a significant impact the final corn and soybean yields, and will ultimately affect the total U.S. corn and soybean production for 2008.

Corn and soybean markets have been extremely volatile since the August 12 USDA Crop Report was released, being nearly limit-down one day, and reversing to nearly limit-up on the following day. Given the continued uncertainty of the 2008 corn and soybean crop, we are likely to more high volatility in the grain markets in the weeks ahead as situations and projections change.

Editor’s note: Kent Thiesse is a former University of Minnesota Extension educator and now is Vice President of MinnStar Bank, Lake Crystal, MN. You can contact him at 507-726-2137 or via e-mail at kent.thiesse@minnstarbank.com.