RPT-COLUMN-U.S. corn can stomach hot weather, but not through July -Braun

2022-06-18 오전 6:30:00

Repeats COLUMN originally published on June 16, no changes. The opinions expressed here are those of the author, a market analyst for Reuters.

By Karen Braun

- Temperatures across the Midwestern United States this week have soared well above average, in some cases to the highest since 2012, when severe drought hit the Corn Belt, wrecking crop yields and boosting prices.

Corn prices have already been near historic 2012 levels with tighter global supplies and uncertainty in major exporter Ukraine. Chicago corn futures CZ2 hit one-month highs Thursday on prospects for hot, dry U.S. weather lasting into next month.

The U.S. Climate Prediction Center on Thursday issued its initial July weather outlook, showing a good portion of the U.S. Corn Belt may be warmer and/or drier than normal. That is consistent with other longer-range forecasts into at least mid-July.

June has been warmer for most of the country. Although not all the Corn Belt has been dry, most has experienced this week’s heat and is set for another round next week. A large swath of the region, centered around Illinois and Indiana, may remain dry through the end of June.

U.S. corn is generally in good condition at this early stage. Although crops will be stressed in blazing heat, permanent damage is avoidable if weather improves next month.

During July, U.S. corn typically undergoes pollination, a critical stage for determining yield potential, which can be limited if the period is hot and dry.

After pollination, the corn ear fills out and the kernels fatten. Hot, dry weather through this stretch can reduce kernel size and weight, curbing production.

Historically, the best yields are observed when July and August are cooler and wetter than normal across the Corn Belt, but the presence of warmer, drier conditions do not necessarily signal disaster.


SOME (DON’T) LIKE IT HOT

In the last three decades, above-trend yields were not observed in the warmest 30% of Midwestern Julys, though yields close to trend resulted a third of the time. That means something around 177 bushels per acre is still on the table in 2022 even if July is warm.

The same thing is true in the top 30% driest Midwestern July-Augusts: above-trend corn yields did not occur, but near-trend was observed a few times. Only one-third of the driest July-Augusts overlaps with the hottest Julys: 1999, 2011 and 2012.

Both the hottest and driest was 2012, when U.S. corn yield plunged by about a quarter from normal levels. But there are distinct differences between 2012 and 2022. The corn was planted nearly three weeks later this year and drought was more widespread at this point in 2012.

Planting pace and June weather were both normal in 1999, and August temperatures were cool, and trend yields resulted. June 2011 weather was close to normal, but planting was late, and corn yield fell about 8% off trend after an abnormally warm July.

High rainfall does not always produce good yields. The 2010 corn crop was planted quickly and abundant rains fell in June and July, but yields came in well below analyst predictions because of a less obvious temperature trend.

Daytime temperatures in 2010 were not standout warm, but minimum temperatures that summer were the Midwest’s warmest in 127 years of record. Persistently warm nights may not allow for maximum grain fill as the crop is pushed more quickly toward maturity.

This year’s later planting pace means pollination is likely to occur toward middle or later July. Weather does not have to turn completely favorable before then, but corn futures may come under pressure if non-threatening weather looks on tap, especially coming out of the long July 4 weekend.


Karen Braun is a market analyst for Reuters. Views expressed above are her own.


(Editing by David Gregorio)

(( karen.braun@thomsonreuters.com ; Twitter: https://twitter.com/kannbwx) )



Keywords: USA-CORN/BRAUN (REPEAT, COLUMN, PIX)