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Best of NAMA 2022

by Sara Schafer, Farm Journal

December corn futures rose to the highest price since late June and soybeans and wheat also rose amid concern over dry weather.

Why did corn prices surge? Several bullish factors are at play, says Joe Vaclavik, president of Standard Grain. Those include:

1. Lower crop condition ratings.

As of Aug. 21, USDA estimates 55% of the U.S. corn crop is in good-to-excellent condition. That's down two percentage points from last week and five percentage points from this time last year. "That's the lowest rating in at least five years," Vaclavik says.

2. Severe drought across the globe.

Severe droughts across the Northern Hemisphere - stretching from the farms of California to waterways in Europe and China - are further snarling supply chains and driving up the prices of food and energy, adding pressure to a global trade system already under stress, the Wall Street Journal reports. Parts of China are experiencing their longest sustained heat wave since record-keeping began in 1961, leading to manufacturing shutdowns owing to lack of hydropower.

The drought affecting Spain, Portugal, France and Italy is on track to be the worst in 500 years.

In the American West, a drought that began two decades ago now appears to be the worst in 1,200 years. For some of the world's biggest economies, this summer's droughts are hurting industries including electricity generation, agriculture, manufacturing and tourism. That is compounding existing strains such as supply-chain disruptions stemming from the Covid-19 pandemic and pressure on energy and food prices from the war in Ukraine, the WSJ article concludes.

3. Disappointing Pro Farmer Crop Tour findings

Here's a rundown of the 2022 Pro Farmer Crop Tour data:

To read the entire report click here.

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