Grain markets closed higher today as cash availability of corn and beans is extremely hard to come by, basis levels are very strong, and there are some concerns with global weather.
Grain Market News
Brazil 2-Wk Precipitation Forecast
This two-week precipitation forecast for Brazil highlights the problem. The first week of the forecast showing virtually no precipitation in the safrinha corn growing region in the red oval. The second week not showing much improvement either with most of the oval remaining dry. An additional two weeks of dryness is definitely going to trim additional production from the safrinha corn crop in Brazil.
7-Day Observed Precipitation
Most of the eastern and southern belt has received substantial rain over the last week. In addition, there was a narrow band of rain through NE, northwest IA, southeast MN, and into WI. Those rains definitely seen as beneficial where they fell in the western belt. Unfortunately, from northwest through most of MN and the Dakota’s into the Canadian Prairie has not seen much rain over the past 7 days.
U.S. Radar 5-4-21 at 12pm
The current U.S. radar shows rains in the southern and eastern belt. Most of this rain moving to the east and north east which is not going to provide much relief in the central and western belt.
7-Day Precipitation Forecast
There is some rain, the darker green are 0.25” so 0.25-0.75” could fall in portions of the western belt and northern Plains but the best rains continue to be in the eastern belt, the Delta, and deep south. The general pattern is drier to the northwestern region.
6-10 and 8-14 Day Forecast
The 6-10 day and the 8-14 day forecast shows a generally cooler than normal pattern in the 6-10 and 8-14 day. Precipitation wise, above normal precipitation for almost the entire U.S. corn and bean belt in both the 6-10 and 8-14 day. The only exception could be some dryness in the far northern region, northern ND and into the southern Canadian Prairie. But again most of the belt looks to be relatively cool and damp as we head into May. This weather forecast may not be ideal. Most producers would like to see warmer, wetter conditions. Cooler and wetter certainly not threatening but not ideal either.
Grain Market News
Winter Wheat Crop Condition
We can see the wheat condition here with 49% G/E down just 1% to 48% G/E. As we’ve mentioned, this crop is a fairly average rated crop. Plenty of years where we had a higher or lower rating. This year’s crop pretty close to average for early May.
U.S. Corn Planting Progress
Corn planting progress sitting at 46% planted. That corn planting progress a little ahead of the 5 year average but keep in mind, the 5-year average includes some extreme slow years contributing the slow 5-year planting.
Weekly Corn Planting Progress
This chart is exactly the same data as the previous slide but shows it from a different perspective. This chart shows weekly planting progress, not cumulative but what we planted each week. Two weeks ago we planted 9% of the crop, below the 14% average. USDA reported yesterday that last week we planted 29% of the U.S. corn crop. That’s the best single week we’ve had any week over the past 5 years. IA planted 49% of its crop last week. As of right now, we’re in the heart or peak of our planting.
U.S. Soybean Planting Progress
Soybean planting progress is at 24% planted compared to 21% last year and 11% on average. Because of the slow planting we saw in 2018 and 2019, we are ahead of the 5 year average but we’re not at the same levels during some of the drier springs. Bottom line, we’re getting off to a very good start with U.S. planting of corn and beans. Now we just need some rainfall to help with germination and emergence.
July Corn Chart
Corn prices surged to new contract highs, hit $7.04 in the July contract today. We closed at $6.69’4. That is still a new high close and a new contract high close for the July contract.
July Soybean Chart
Soybean prices have carved out a range. Last week’s high at $15.74. Last week’s low at $14.90 and we’ve been within that range for about a week and a half. We think weather is the key going forward. If we start to see some better rains developing in the forecast we could push this market down towards chart support. If the forecast remains dry then this market can push into new highs. Anything within this range seems to be fair game at this time.
July KC Wheat Chart
Wheat prices established a high last week at $7.41, a low at $6.82. Anything within this range is fair game in the near term. Weather will likely to be a player and wheat is likely to follow the generally direction of the corn market.