Chris Hurt

The rain and snow that have recharged Indiana soil this winter has not been doing the same in Iowa and several Western Corn Belt states.  Purdue Ag Economist Dr. Chris Hurt says this is a potentially serious and may dramatically change crop prospects this year, “For the past 60 to 90 days, the Western Corn Belt has been very dry.” He said the National Weather Service has put Northwest Iowa, along with parts of Minnesota, South Dakota, and Nebraska in stage 2 drought.  He said the pattern of dryness does not look like it is going to change anytime soon, “It looks like this area will remain dry for the rest of the winter.”

Hurt predicts that a dry winter in the west will lead to early planting of the 2012 crop but not necessarily to higher yields.  He warns that traders at the CBOT may interpret an early pace of planting as a sign of high yields, but warns that may not be the case, “As we all know, an early pace of planting due to dry conditions will not mean a high yields.”  Hurt told HAT the market is anticipating higher corn acreage to be planted this year, but warns it is too early to take a big crop for granted, “It is way too early for the US grain market to say we have enough old crop to get us through and then we will have a big crop this fall.” He said it is too early to take weather premiums out of this market, “Because we are in a very scary weather pattern, especially for the western and northern part of the Corn Belt.”

He urged producers to keep an eye on the weather, not only in the eastern part of the US but in the west, “It looks like the downside on corn is about 25 cents to 30 cents a bushel, but there sure is upside potential of at least 50 cents.”  He sees grain supplies remaining tight this spring since a lot of holders of old crop corn are waiting to see if prices will move up closer to $7 like they were last fall.

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