Late-summer heat blast triggers soy complex surge
Deep into the 2013 row crop growing season, ingredient markets are beginning to take on the feel of a certain kind of horror movie. Witnessing the wilting of the soybean crop and the surge in soy complex futures prices brings to mind the memorable tagline from the forgettable 1978 "Jaws 2" film – “Just when you thought it was safe to get back in the water...”
Thanks to the searing heat wave, only 30% of the U.S. soybean crop was rated as good or excellent as of Aug. 25, down from 64% at the start of the month. Significant further deterioration was sustained in the final days of August. Over a three-week period, new crop soybean futures prices were up nearly $2 a bu. Prices of wheat and corn have risen, too, but not nearly as much. Thankfully, prospects for corn remained excellent on the eve of the fall harvest, with confidence standing for a record crop.
Heat, not dryness, was the principal problem in most areas, at least initially. Even as prices began to surge in mid-August, subsoil moisture ratings generally were adequate in most growing areas. In his monthly weather column (see Page 42) meteorologist Drew Lerner calls this summer’s weather a “perfect example of how production is far more influenced by temperatures than by precipitation.” It’s also a good reminder that risks to major crops do not end with the wheat harvest and the corn pollination period.