Grian markets finished lower today partly on a correction from last week’s big rally but the biggest factor is probably that U.S. weather looks to be improving now through the next couple of weeks.
Grain Market News
7-Day Observed Precipitation
With planting well advanced here in the U.S., rain marks grain and we’ve had very nice rains over the past week. We saw 1-1.5” with a large areas of eastern IA, IL, IN, and OH seeing 2-3” of rain over the past week. Good rains in the Delta, generally 0.5-1.5” with isolated 2” totals. It’s been drier in the western Plains and the northwestern belt, but it hasn’t been completely dry. These rains are not drought breaking rains but at least it proves that mother nature can put down a little bit of rain during this drought in the northern Plains. The easy way to sum up this map is that most of the U.S. corn and bean belt got some decent rains over the last week with just a few pockets that missed out. Overall, we look at weather as an improving factor and a negative for our grain market.
7-Day Precipitation Forecast
Good news for farmers, the northern Plains, northwestern belt, and into the central Plains could get some good rains. The forecast looks pretty good going forward. We may not end the drought but certainly the rains would be welcomed.
6-10 and 8-14 Day Forecast
The longer term weather maps are looking favorable if they verify. The 6-10 and 8-14 day both show warmer temperatures. In May warmer temperatures are a good thing. Precipitation is expected to be above normal for most of the below including the northwestern belt and the northern Plains and that is turn for both the 6-10 and 8-14 day forecast. If this forecast is correct, it would be viewed as very favorable for U.S. corn and bean crops which are getting planting.
Corn: Weekly Export Inspections
Corn exports down from last week. We’re still above the level needed for about 11 weeks in a row. But down to 67 mb, that is still 11 mb above what is needed on a weekly basis so corn exports remain strong.
Soybean: Weekly Export Inspections
Soybean inspections came in between 8-9 mb. Not a big number and actually a little bit below the level needed to reach USDA’s export forecast. This is the 5th week in a row that soybean exports came in below USDA’s needed level and that is why we believe USDA is likely going to leave its export estimate for beans in Wednesday crop report.
Wheat: Weekly Export Inspections
Wheat inspections continue to be disappointing, 18.7 mb is well below what is needed to wrap-up the crop marketing year with just 4 weeks left to go. With wheat inspections running consistently below the level needed it is very possible that USDA will lower its export forecast for wheat in Wednesday crop report.
Grain Market News
U.S. Ending Stocks
South American 2021 Production
World Ending Stocks
July Corn Chart
Corn price did not make a new high for the first time in over a week. We had a very disappointing close. It was enough to turn our technicals down. This tells us the market may be interested in testing the first major level of just support at $6.84 and that’s about 25-30 cents below where we’re currently trading which is certainly a possibility after the market rallied $2.17 in 5-6 weeks. A correction back towards $6.84 can not be ruled out.
July Soybean Chart
Soybean prices also pulling back just a little bit in the July. Overall, the chart is still pointed upward. Initial chart support at $15.74 was tested today and if the U.S. weather would remain favorable we would not rule out going down to $14.91 where we have somewhat of double bottom. That would be the next level of significant chart support if we get favorable weather and the market pulls back further.
July KC Wheat Chart
Wheat prices had a double top at Friday’s high at $7.41 matching the high from 2-3 weeks ago at $7.41 in the July contract. A big down day in the KC wheat as well as Chicago and Minneapolis wheat has turned the technicals back down. The next level of support for wheat would be $6.82, about 20 cents below where we closed today.