The most exciting thing about the dry bean market this week was watching corn, wheat, and soybeans continue to rally. Dry bean prices were flat across the board and the only news that matters to dry bean growers at this point involves the rain forecast. Colorado and Nebraska dry bean growers received limited rainfall this week and continue to be stressed out by mother nature.The drought map picture below is worth a thousand words alone…and some of them would not be polite to repeat here on this blog.
The driest conditions seen in 24 years is giving agricultural growers in the central US increasing pressure, and with the current forecast predicting continued drought conditions of moderate to extreme; growers know their yields are in jeopardy during this crucial phase in the growth cycle. Ag-markets continued to rally this week and caused traders to up their bets after the USDA cut its corn outlook by 12% on July, 11, only four weeks after predicting a record harvest. Although consumers have yet to feel the pinch, the rain deprivation in major growing regions is definitely going to cause volatility in food prices this upcoming year.
But the million dollar question for dry beans is: “how will this years drought affect dry bean markets”? Traders can only speculate about the long term effects this will have on the bean market, but growers must take a position in order to make a profit and continue their livelihood. Dry bean growers outside of the big 3 (ND, MN, MI) have some difficult decisions to make and I would not want to be in their boots.
As far as the big 3 growers are concerned, well…… there not. Conditions have been favorable across these states and most growers are expecting an early harvest with good yields as long as mother nature continues to cooperate.
Bottom line: Maybe it’s time to start thinking about taking a position in corn