The Ever.Ag Podcast

From the Furrow – David Tolleris – June 25, 2024


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In our weekly series From the Furrow, host Mike McGinnis and fellow grain geeks shed light on current market conditions and how grain producers can take action to manage their risk.

This week, Mike is joined by David Tolleris, meteorologist with WxRisk.com. How has recent severe weather impacted crops in the Midwest? What’s the weather outlook for the Corn Belt through the rest of June? Mike and David discuss those topics and a whole lot more.

Questions or comments? Topics you’d like to hear us discuss? Contact us at [email protected].

Show Transcript

(Transcript auto-generated)

00;00;00;24 – 00;00;17;11

VOICEOVER
Futures trading involves risk and is not suitable for all investors. Content provided in the segment is meant for educational purposes and is not a solicitation to buy or sell commodities. Opinions and statements of guests not affiliated with Ever AG are their own and do not reflect the views of a brand. The accuracy of their statements cannot be guaranteed by eg.

00;00;17;14 – 00;00;40;26

MIKE
Well, hello and welcome to From the Furrow, brought to you by Ever AG Insights. Each week we talk with subject matter experts on news and topics affecting the grain markets. I’m your host, Mike McGinnis, and we get started with the review of the markets on this June 25th, 2024. It’s Tuesday and we have pressure in the markets. Corn is down seven and a quarter cents at 426 and the nearby new crop down seven and three quarters at 440.

00;00;40;26 – 00;01;01;07

MIKE
Soybeans for July down 16.75 cents at 1158. And the new crop November down 20.25 cents at 1110. July wheat down nine and a quarter at 542. So plenty of pressure in the markets. And the guest today is MIKE Taylor, SI’s meteorologist with weather risk. Com MIKE, thanks for joining us.

00;01;01;07 – 00;01;04;08

DAVE
Thanks for having me in. Let’s talk weather because there’s a lot to talk about.

00;01;04;08 – 00;01;26;01

MIKE
Well, and right now that’s the biggest fundamental factor for the markets because we’re entering the last part of June. July is the most important month for the corn crop, August being the most important for soybeans. But right now, of course, a lot to talk about because of the flooding that we’ve had in the month of June, folks are wondering how long these crops can hold their breath underwater.

00;01;26;02 – 00;01;38;14

MIKE
We’ll talk about that as well. First off, David, give us a quick synopsis of what has happened weather wise here in the month of June and why, as far as your weather background goes, tell us why this flooding and these continued storms have happened.

00;01;38;15 – 00;02;02;13

DAVE
Well, the pattern has been dominated. This is a typical summer pattern, which occurs when you have a lot of cold water, which is built up along the eastern Pacific on the West Coast, North America, from Alaska down to Baja California. Now that all exists also the winter time as well. That kind of sea surface temperature pattern where you have really warm water in the central Pacific and cold water relative to normal from Alaska down to California.

00;02;02;15 – 00;02;23;06

DAVE
That’s called the negative phase of the PDO. The term negative refers to the cold water. You can also have a positive phase when you have warm water on the coast of North America. Right now, it’s cold water, but that alters the jet stream when you have that much cold water sticking around for weeks and weeks and weeks, it alters the jet stream and then places the mean trough along the west coast of North America into the Rockies.

00;02;23;08 – 00;02;45;17

DAVE
When that happens, the atmosphere responds by developing a ridge next to the trough, which in this case had been over the southeastern states in the East coast. Now that as a result, what happens is we get a battle zone between the trough and the Rockies that’s trying to drive into the plains of the Midwest and the ridge over the eastern United States in the southeast, which is keeping the trough stopped over the Rockies.

00;02;45;17 – 00;03;10;02

DAVE
That creates a battle zone where cold fronts and low pressure areas slam into each other. And we get persistent rain across the Dakotas, Minnesota, Wisconsin, northwest Iowa and northern Nebraska. So over the past 30 days, for example, these areas that we’re seeing anywhere from 250 to 550% of normal rainfall over the past 30 days. Meanwhile, in the Eastern Corn Belt, we have a flash drought which has developed.

00;03;10;02 – 00;03;30;17

DAVE
It’s actually began in England and the Mid-Atlantic region, and it has spread into Ohio, Indiana, Illinois, Kentucky, and now into Missouri. These areas over the past 30 days, have we seen anywhere from 25 to 50% of normal rainfall in most places, which is very, very dry. So the areas which had the rain, I’ve been getting more rain and the areas which have not gotten the rain haven’t seen any rain.

00;03;30;17 – 00;03;33;05

DAVE
And that’s where we’ve been for the past 30 days.

00;03;33;05 – 00;03;50;04

MIKE
Well, let’s talk about the forecast for the Corn Belt states to end the month of June and then break down, if you would, the outlook for Iowa, Illinois, Indiana, because right now we’re talking about wet conditions in the western Corn Belt and northwest and drier conditions in the eastern Corn Belt. How does it look going forward?

00;03;50;05 – 00;04;16;27

DAVE
Well, for farmers, there’s good news for everybody. Now, if you’re trading, it’s a little more difficult. But for farmers it’s good news. New model data from early this morning and midday is shifting. The rain coming in here on Thursday and Friday out of the flooded areas of northwest Iowa, northern Iowa, northern Wisconsin, Minnesota and the eastern Dakotas. It’s shifting the rain to central and southern Iowa, which is much, much drier Nebraska, Missouri and then into Illinois, Indiana, Ohio.

00;04;16;28 – 00;04;40;08

DAVE
This is the first rain event on Thursday, and that rain will spread into the Eastern Corn Belt on Friday. So that means that over the next five days, the flooded areas in Minnesota and northwest Iowa, central and northern Wisconsin, and the eastern Dakotas will probably see under one inch of rain over the next five days. Now, that’s going to allow for a lot of drawing for the water levels to begin to drop pretty significantly.

00;04;40;08 – 00;05;01;09

DAVE
So some areas could get under. It may not even see a half inch of rain over the next five days. So that’s really good news. Now, on the other hand, because the rains are shifting to the south, that is driving rain into the dry areas, the flash drought areas of Missouri, of Illinois, Indiana, Ohio and Kentucky. And that’s exactly what we see with the next system on Thursday and Friday.

00;05;01;13 – 00;05;21;12

DAVE
And then there’s the cold front, which comes down on Friday and Saturday, which is going to be also an eastern corn belt, Mid-Atlantic type of rain event with showers and thunderstorms for this weekend. So that looks pretty good. And then we have high pressure that comes in for the 29th and 30th Canadian high pressure, low humidity, lots of sunshine, moderate temperatures.

00;05;21;14 – 00;05;28;06

DAVE
So the end of the last two days of the month look pretty good. Then we have more problems going into the 6 to 10 day in the first week of July.

00;05;28;06 – 00;05;45;17

MIKE
And that was my next question. What does it look like to start the month of July? And I know that at one point you were talking about a week two forecast earlier this week. Anyway, you were talking about a week two forecast of significant rains returning to the Dakotas, Iowa, Minnesota and Wisconsin. And those areas that already had a lot of rain.

00;05;45;17 – 00;05;47;20

MIKE
We’re going to get more. Is that still the story?

00;05;47;21 – 00;06;07;19

DAVE
Well, to some degree it is now. It has shifted a little bit. Here. We have a cold front. The next one’s coming through on July 1st and second. And that’s going to bring some rain. Not as much rain as we’ve seen. Not the 6 to 10 inch range, not the 3 to 4 and range but normal ordinary rains on July 1st and second for the Dakotas, Iowa, Minnesota, Wisconsin.

00;06;07;19 – 00;06;31;18

DAVE
That front pushes through. High pressure comes in behind it. It’s a pretty strong front. I know the Canadian high comes down a couple of nice days and then another front July 3rd and fourth and another 1st July fourth and fifth. It does look like the first week of July is going to be pretty stormy. None of these rains look to be especially heavy, but will you have something on July 1st and second, then July 3rd and fourth, then July 4th or fifth?

00;06;31;18 – 00;06;48;24

DAVE
It’s just going to pile up again. So you’re going to start getting hit a lot during the first week of July. And some of these rains will also get into the Eastern Corn Belt. These rains are a little different, because these rains will help break the drought or dryness and the eastern corn milk, and they won’t be quite as heavy in the western Corn Belt.

00;06;48;25 – 00;06;51;01

DAVE
That’s what we’re looking like in the first week of July.

00;06;51;01 – 00;07;13;00

MIKE
So that’s really some favorable weather for both parts of the Corn Belt, because you really want some relief for those Western Corn Belt states and those crops in there, and then relief for rain falling in the eastern Corn Belt. So what about the 11 to 15 day forecast, the original one or the one this past week was showing a pattern of a essentially a wet July coming.

00;07;13;00 – 00;07;16;00

MIKE
Do you still see that at least through the first half of the month?

00;07;16;00 – 00;07;32;26

DAVE
Yeah. What the data is showing the 11 to 15 day data, the actual model data from this morning actually back off rains a little bit in the western corn Belt and in the wet areas. I think that’s wrong. If you look at what the models are showing in terms of the pattern, we’re looking at a heat ridge pattern, but a southern one.

00;07;32;26 – 00;07;51;16

DAVE
In other words, it sets up from Colorado and New Mexico, across Texas, lower Plains towards Georgia, Tennessee and the Carolinas. So underneath that whole area, which is essentially if you have one of those maps of the US highways, you can, you know, use the highways as boundaries. Everybody south of Interstate 40 stay pretty hot and dry for most of July.

00;07;51;17 – 00;08;08;27

DAVE
Now, that’s not unusual for that part of the country. I mean, is July, it’s going to be hot in the Deep South. That’s not breaking news. But what that does is that places the jetstream north of the heat ridge across the Dakotas and the Western Corn Belt, the Great Lakes. So as a result, everybody north of Interstate 80 looks pretty stormy for most of July.

00;08;08;27 – 00;08;30;11

DAVE
And the climate models and the weekly models reflect that. They have large areas of above normal rainfall. So that would imply the northern half of Iowa, Minnesota, Wisconsin, you know, far northern Illinois, Michigan and the Dakotas. But that leaves a gap, which is where the uncertainty is between Interstate 80. And in case you don’t know where that is, that runs essentially from northern Pennsylvania to Chicago, all the way to the central Rock.

00;08;30;12 – 00;08;49;16

DAVE
Right. And then Interstate 40 that once on the Carolinas to Arkansas into Oklahoma. Okay. Between those two areas where the heart of the Midwest and the Central Plains is, is the uncertainty. If the cold fronts come far enough to the south, those areas will get rain. But if the cold fronts stay north of Interstate 80, then you’re looking at the Eastern Corn Belt potentially turning dry again.

00;08;49;16 – 00;09;05;10

DAVE
But of course, if we get these rains coming up here in the next ten days, as the models are showing, that might not be that much of a problem. So that’s where we’re sitting at for July. Definitely wet and stormy north of the state 80. Definitely hot and dry. No rain south of Interstate 40 for most of July.

00;09;05;12 – 00;09;11;08

DAVE
But that area in between where you know, where I think the Central Plains least important. Well, that’s kind of the risk area that could go either way.

00;09;11;10 – 00;09;29;03

MIKE
Well, it’s going to be something to watch, obviously. And sounds like on a week, a week and maybe day to day situation because everybody’s trying to figure out how damaged is this crop in the Western Corn Belt already from flooding, and how weak is the eastern core about crop not receiving the needed rain in the month of June?

00;09;29;03 – 00;09;43;13

MIKE
So that will be something everybody will be watching. The other thing is, weather wise, there was a lot of talk, MIKE, about La Nina developing and now, according to some notes that you’ve sent out, maybe La Nina is not developing as expected right now.

00;09;43;13 – 00;10;03;16

DAVE
Of course, the official version from the Climate Prediction Center, National Weather Service, and, you know, the World Meteorological Organization, guys from Australia, they do a lot of work on the El Nino. So to the Japanese, all these scientists are generally saying that La Nina is coming. And that is the official position. The problem is that when you look at the model data, they keep delaying and delaying and delaying the La Nina.

00;10;03;16 – 00;10;24;26

DAVE
So, for example, the primary climate model you use here in the United States is the CFS, the climate forecast system, CFS. Now back in April, it had La Nina developing by July. There’s a certain criteria -0.5 recorded. So for July by July 15th it had the La Nina at around -0.6, which is a week La Nina. And then it continued to intensify.

00;10;24;26 – 00;10;44;16

DAVE
So by August September we’re moderate a La Nina. Now the new data has one Nina not starting until August. It says completely neutral for the entire month of July. And that’s also true with the European model. The British model has changed. The German model, the Japanese, they’ve all backed off of a Nina. Some of these models never show La Nina developing through November or December.

00;10;44;19 – 00;10;45;20

DAVE
They keep it neutral.

00;10;45;20 – 00;10;50;23

MIKE
So what does this mean if La Nina doesn’t show up until August? What does it mean for the Corn Belt states?

00;10;50;24 – 00;11;19;14

DAVE
Well, it means almost normal conditions, the only detriment here in terms of weather wise, in terms of long term climate patterns, would be a negative PDO. A negative PDO have a tendency of making especially the Eastern Corn Belt hot and dry, but it can also impact the Western Corn Belt. But that’s the only negative factor, because if we don’t have La Nina, the only thing really that implies almost normal weather conditions for the summer across the plains in the Midwest, and the only inhibiting factor or negative factor would be the negative PDO.

00;11;19;14 – 00;11;37;14

DAVE
So not getting La Nina also has implications for the hurricane season. One of the reasons why all the seasonal hurricane forecasts for so active and so extreme was because we have a very warm Atlantic, we have a negative PDO, and we have a La Nina development. Well, we don’t we may not have a lot Nina developing and if it does it’s coming in much weaker than originally forecast.

00;11;37;14 – 00;11;54;17

DAVE
And then down the road it affects South America because you know the South American growing season starts up. And if we don’t have a Nina developing are going to be impacted. So you know it’s got big implications. Now officially the view is it’s slow coming on, but it’s not going to be here until the autumn. And when it shows up it’s going to be a very weak one if that.

00;11;54;17 – 00;11;56;17

DAVE
But there’s a real possibility it doesn’t develop at all.

00;11;56;20 – 00;12;01;12

MIKE
Well, MIKE, tell the folks how they can get Ahold of you have to get more information about you and your services.

00;12;01;14 – 00;12;18;01

DAVE
Sure. Well, the website is pretty easy to get to. It’s dot com. That’s whiskey x ray risk, just like the game. Whether it’s dot com, you can contact me that way. And also you can contact me through the Twitter page which is weather risk screens. One more risk screens and you can reach me that way as well.

00;12;18;02 – 00;12;22;12

MIKE
That’s great. Well, thanks again for joining us today MIKE to learn with weather risk.com.

00;12;22;12 – 00;12;24;05

DAVE
Thanks, MIKE. Thanks, Mike. It was my pleasure.

00;12;24;05 – 00;12;34;04

MIKE
You bet. If you’ve enjoyed listening to From the Furrow, be sure to tell a friend or to and subscribe to us wherever you listen to your podcast. Thank you to the Ever AG Insights Crew for their work on today’s show.

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