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U.S. crop outlook is good for now

Market analyst Arlan Suderman says the weather forecast is making it difficult for the grain markets to sustain a rally.

“There are areas that have missed out on rains; some areas with too much rains and the crops can’t get planted. Overall, the crop has gone in well and we’ve had good moisture or are about to get good moisture. The trade is assuming right now close to a trend yield.”

Suderman says it wouldn’t take much of a decline in the national average yield to require rationing of demand with corn or soybean prices. He says the U.S. weather forecast becomes more important to prices moving forward.

“We’re watching for a major high pressure system to set up and lock in over the Midwest. The long-range models have been calling for that to happen now for about the past month to month and a half, but it hasn’t pulled into the current weather pattern at all.”

Suderman says if a high-pressure system sets up in the Corn Belt and blocks moisture, the location is important.

“If it sets up over Iowa, it could result in a short crop for the United States. If it sets up over Wyoming, that could set up a scenario with a bumper crop.”

Suderman is the chief commodities economist with Stone X Group.