Breadbasket showers bring sprinkle of hope. Soybeans salvageable if rain continues
The great drought in the United States may be coming to an end. The most important sign so far has been a break in the weather. Two weeks ago, rains began to fall in the most parched regions of the nation's breadbasket.
The question now is whether the weather pattern that caused the drought has changed for good.
``It did break,'' says Tony Barnston, a meteorologist for the Climate Analysis Center of the National Weather Service. But ``we really don't know whether it's broken for the rest of the summer.''
Adds Gail Martell, an agricultural meteorologist at Shearson Lehman Hutton Inc.: ``The last two weeks have been very beneficial, no doubt about it. [But] you don't have much reserve moisture in the soil. ... We are going to have to have continued rains.''
The best guess about future rainfall is the weather service's 30-day outlook, which was released Friday. It suggests that the drought will move eastward and affect a much smaller area than it did during the first half of the summer. Only northern Missouri and central portions of Illinois, Indiana, and Ohio will have below-normal rainfall, according to the outlook.
On the other hand, Ms. Martell points out, that region of the Midwest is a critical soybean-producing area. Illinois is the US's largest soybean-producing state. With continued rains, damage could be limited to 15 percent to 20 percent of a normal soybean crop. Without rain, the damage is anybody's guess.
The grain markets have been guessing all summer, producing wild fluctuations. During the first half of the season as the drought intensified, traders pushed soybean prices up to near-record levels. At the end of June, the Chicago futures price stood at $10.99 a bushel - the second-highest price ever. Prices then collapsed with the coming of showers. But prices are now rising again after scorching temperatures hit the Midwest over the weekend.
Temperatures for six states - Iowa, Wyoming, Minnesota, Wisconsin, Illinois, and South Dakota - set new records Sunday. Peoria, Ill., hit 102 degrees, tying the record for the hottest day, set in 1890. The Minneapolis-St. Paul area reached 105 degrees, the highest reading in 52 years.
The weekend heat has made grain traders anxious again. As of mid-morning yesterday, the Chicago futures price for August soybeans had shot up 69 cents to $8.45.
``All we did with the recent moisture ... was keep the crop alive,'' says David Bartholomew, an analyst at Merrill Lynch Futures Inc. August is the key month that will determine whether the soybean crop pulls through or gets worse.
Recent rains have helped more than just crops. Shipping along the Mississippi River has improved, if only temporarily, as water levels have risen.
``That respite helped out a lot,'' says Bob Anderson, a spokesman for the US Army Corps of Engineers in Memphis. ``A lot of the boats that were stuck were allowed to get free.''