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Heat dome adds risk to U.S. crop potential as corn enters critical pollination stage

A market analyst says the current heat dome could reduce U.S. crop potential.

“We’re at a crossroads,” says Don Roose, U.S. Commodities. “Are we going to continue to be threatened? Are we going to go into more of a normal growing condition? Is the heat dome going to move around and help or hurt us? It’s definitely adding risk premium to the market very quickly.”

He tells Brownfield USDA’s yield forecast assumes favorable growing conditions, and it’s unclear if it’s achievable.

“Last year, in the July report on corn, the government had the yield at 188.8 bushels/acre. We ended up at 186.5 bushels/acre. We have a 183 bushels/acre yield estimate now. You need some pretty good growing weather to hit that kind of a yield.”

The U.S. is in a critical period for kernel potential. As of Sunday, the USDA says 34 percent of the U.S. corn crop is pollinating with 68 percent of U.S. corn in good to excellent condition.

Roose says all eyes will be on the next few U.S. crop condition ratings to confirm any damage, and how prices adjust.

“Do those crop ratings go down and the crops getting smaller and we ratchet higher at risk premium, or do we go the other way and we take risk premium out of the market?”

Hear Brownfield’s interview with Don Roose.