Well, since most part of the weather market months have passed, let’s talk about the balance it left to us so far. Do not be mistaken, this will still be a below-potential crop in the US in terms of yields, conditions say so. However, it will not be as catastrophic as it could have turned out to be in case June’s weather persisted throughout the summer.
We established the weather took a turn for the worse in the latter half of August, and that could have an impact on yields, especially of soybeans. In turn, that is most certainly going to lead to a cut in the next WASDE, right? Well, not necessarily.
Looking at the evolution of the condition index, we see that soybeans saw an improvement since the weeks when farmers were being surveyed for the August report.
These poor climatic conditions are likely to drag the index down. However, it may be the case that, by the time surveys are taking place for the September report, conditions are back to where they were when the last report was in the making.
If we take conditions to be a good predictor of yields, which is an assumption in and of itself (though generally a good one), it will mean that farmer’s prospects of yields may not have as much “reason” to be trimmed down as it seems at first.
