At this time of year, weather is generally the main price driver and in that regard heading into the three most critical months of the growing season, one cannot deny that the early row crop development has been quite favorable with the immediate weather outlook also very positive.
The U.S. corn and soybeans have been planted at an above average pace with stands reported both numerous and strong.
Almost 90% of the Midwest is well-watered and the latest two week forecast calls for nice mix of rains and sun.
Plant development is also in its vegetative stages so it is often difficult to do too much damage to the crops even if weather has been challenging.
The accompanying chart which shows the percentage move by both December corn and December soybean meal from May 28th of Memorial Day weekend to the 3rd of July before Independence Day is often negative.
Of the 30 years tracked between the two holidays, corn prices lost ground 18 times while soybean meal fell 16 times.
The average move however between Memorial Day and 4th of July is up 0.8% for corn and up 1.8% for soybean meal.
The reason for this is that upward price moves in June are higher in percent terms than seen for price declines.
The largest losses for corn occurred in 2009 when all commodities were collapsing due to the global financial meltdown and corn was off 20.8% with the greatest soybean meal losses was seen in 2000 at 12.7%.
On the other hand adverse weather, drought in 1988 and 2012 and wetness in 2008 and a year ago resulted in corn price gains of 51.3%, 36.1%, 24.8% and 16.8% respectively for corn and 20.6%, 19.4%, 28.1% and 15.7% for soybean meal.
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