Cool temperatures across the U.S. Midwest changed the psychology of the marketplace recently, just like in the olden days of “open outcry” trading in Chicago, Illinois, U.S. Back in those days traders on the Chicago Board of Trade floor often would think the weather across the Midwest was improving every time significant rain fell in Chicago. Now with mostly electronic trading in place, a broad-based weather system still can have a similar effect.

Recent broad-based cooling has changed the mindset of many traders that concerns over dryness in the U.S. states of Iowa, Illinois, parts of Missouri and areas to the west are no longer an issue because of rain that fell in late July and the cool weather that has prevailed since then.

The reality of the situation is a bit different. Certainly, recent rain during the time of pollination helped induce successful corn kernel formation in most areas in the Midwest. However, there are still many square miles of dryness in the western Corn and Soybean Belt, and a little heat and continued dryness later this month could very quickly change the mindset of many traders, especially about soybean production.

Rain in July was timely, but many areas in the western Corn Belt that have struggled with restricted rainfall since May still are dealing with the same situation. Rainfall for the two-week period ended Aug. 7 was well below average across northern Missouri, most of Iowa, southern Minnesota and areas east into Michigan and Ohio. The dryness in Ohio, parts of Indiana and in portions of both northern Illinois and southern Wisconsin was welcome after very rainy weather occurred earlier in the summer. Worry over wet conditions harming crops was finally put to rest, but now the worry is over degree day accumulations and over the potential for early frost and freezes.

There was not much worry in the first week of August over limited rainfall still ongoing in the western U.S. Midwest.  Rainfall for the 30-day period ended Aug. 7 was still well below average in a large part of Iowa, eastern Nebraska, portions of northern and eastern Missouri and west-central and southwestern Illinois. Other areas, like southern Michigan, eastern North Dakota, and portions of Minnesota and Nebraska, had been trending drier biased. However, the psychology of cool weather has interfered with concern over dryness, which has not really changed since cold weather invaded the region. It will not take long for a short term burst of warmer weather to scare a few folks, and that may be coming for a brief period around mid-month.

Top and subsoil moisture in portions of Illinois, Iowa and southeastern South Dakota is very low and must be replenished or at least temporarily fixed soon to support crops during the next drier and warmer period. Worry about frost and freeze conditions temporarily may disappear during mid-month as it heats up, but futures prices still could be rising during that time as everyone suddenly realizes there is no moisture to feed the crops.

World Weather, Inc.’s long range forecasting tool, dubbed the “Trend Model,” suggests the expected burst of warmer weather mostly may be confined to the western Corn Belt around mid-month, and when it arrives, it will impact the drier areas of the western Corn Belt quickly because of the already poor soil moisture and stressed state of unirrigated crops. The extra heat, which is not expected to be excessive or extreme, will be just enough to seriously stress some crops unless significant rain evolves immediately ahead of the warmer weather.

soybean field growth
The western Corn and Soybean Belt, and a little heat and continued dryness later this month could very quickly change the mindset of many traders, especially about soybean production.
The Trend Model suggests the warm up will be brief, lasting at least a week and certainly no more than 10 days. It should be followed by another bout of cooling, and that may start turning a few heads as the potential for a little frost begins to evolve in western Canada’s Prairies toward the end of August. For the heart of the Midwest, cool weather is expected to be a little early this year, but it is unclear how deep the cold will be when it arrives and whether it will be capable of inducing damaging frost and freeze conditions.

Farmers like to use the full moons in September and October to predict frost and freeze events, but this year may not work well using that tool, at least not in the Midwest. Rough estimates for warm weather in the western Corn Belt run from Aug. 15-Aug. 21 and possibly as late as Aug. 24. Cooling air will resume relatively quickly behind that period focusing on the last week of August and first days of September. Another period of warming may occur later in the first week of September, interfering with the full moon theory, but World Weather, Inc.’s Trend Model seems to be pointing more toward to the Sept. 15-25 period for a possible early season threat for frost and freezes in portions of the northern Midwest rather than an early month event.

The World Weather, Inc. Trend Model is based on analog years, but when it comes to frost and freeze forecasts, no weather service is going to be much better than another when predicting the cold several weeks before the occurrence because to predict frost and freezes the forecaster has to be within one degree of accuracy in a forecast that is made months in advance. One degree of temperature error can separate a serious frost event from just an unusually cool morning.

Some forecasters and certainly the general public do not believe meteorologists can get the forecast right just a few days from now let alone several weeks from now. However, the market trade wants to know what the odds are that early frost and freezes are possible in the U.S. Midwest and in many other areas around the world. The best answer now is that there is a higher than usual “potential” for frost and freezes occurring a little earlier than usual across portions of Canada’s Prairies, the northern U.S. Plains and both the Great lakes region and northeastern states this autumn, but predicting how early and how intense the cold may be is a little feudal at this point. Just because there is a higher “potential” for such an occurrence does not mean there will be one, but early season cold could have a negative impact on parts of Michigan, Ohio, Ontario and perhaps a few areas in Wisconsin, northern Illinois and southeastern Minnesota where crop development may be a little more behind the usual pace due to rainy weather earlier this season.

In the meantime, some other changes around the world need to be noted. First and most important is Western Australia. The state produces 30% to 40% of the nation’s winter grains and also produces a significant amount of canola. Winter crops were not well established this year, but they are beginning to get rain as spring weather approaches. Predicted rainfall in Australia is expected to increase greatly, and that should help improve winter crop establishment in the 11th hour of establishment season. Warmer temperatures are just a few weeks away, and timely rainfall now could lead to better root and tiller development for small grains, raising production potential.

On the other side of the weather spectrum there is southeastern Europe where hot, dry, weather has been festering recently. Many areas from Hungary into western Romania, Serbia, Macedonia and Bosnia have experienced very dry and sometimes hot weather recently, and that has translated into notable stress for unirrigated crops. Parts of eastern Ukraine and Russia’s Southern Region are also quite dry, and these conditions may worsen for a little while longer (until the seasons begin to change), and that could result in some lower production potential.