Grain markets closed mixed today as USDA released the May crop report and was considered negative for corn prices.
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U.S. Low Temperatures 5-11-12
Weather has been a supportive item along with dry weather in the northern Plains and northwestern Midwest has been supportive along with cold temperatures in the northwest. A good example would be the low temperatures yesterday morning which were in the 20’s for much of northern belt, 30’s across the central belt, and 40’s across the southern belt. This is anywhere from 15-20 degrees below average. It’s not just a single day. We’ve seen cold temperatures for the last 10 days, almost 2 weeks. We do want to make the note, cooler temperatures will be gradually warming and by next week we should start to see temperatures a little above normal.
7-Day Precipitation Forecast
The forecast shows good precipitation for most of the U.S. corn and bean belt. If you’re in the Dakota’s or MN where things are mostly dry it looks like you’ll remain in a mostly dry trend so that does need monitored. But the bulk of the belt and the heart of the belt should be in pretty good shape as we head into the second half of May.
6-10 and 8-14 Day Forecast
The longer-term forecast shows above normal temperatures for the entire central U.S. Since its just the month of May, above normal temperatures are considered good news for germination and early emergence. The 6-10 day shows above normal precipitation for most of the belt. The exception would be in the far northwestern Plains into the southern Canadian Prairie. The 8-14 day shows mostly above normal precipitation. Again, below normal in the far northwestern Plains but the forecast actually looks pretty good for the bulk of the belt going forward.
Soil Moisture Anomaly Change
This map shows the NWS outlook for soil moisture. Anything in yellow is where soil moisture is where soil moisture will decline, green will improve, and white areas are about average. Any areas in green shows where soil moisture will be increasing so no threat in the bulk of the corn and bean belt. This map does show a little bit of a decline in soil moisture in northeast IA, southeastern MN and the Dakota’s and into the Canadian Prairie as well. But the bulk of the belt and the heart of the belt looks pretty good. Bottom line, the current forecast is not ideal and if you’re in the dry areas the dryness could be ongoing. But for the bulk of the belt, the weather forecast doesn’t look too bad.
July Corn Chart
Corn prices consolidating on the chart but today’s close was pretty disappointing. If the markets would push lower over the next couple of days it could make somewhat of a negative chart pattern especially given the technicals are trying to turn south as well. If this market does set back the next level of significant chart support would be around the $6.84 level and that’s about 30 cents below where we closed today.
July Soybean Chart
Soybean prices look very good on the chart. Prices exploded to the upside, especially before today’s crop report. Hitting a high of $16.67. That’s a new contract high with a new contract high close. The bean market, although we’re extremely overbought from a technical perspective is still in an uptrend. If the soybean market would see a pullback, the first level of major chart support is around $15.74, 70 cents below where we closed today.
July KC Wheat Chart
Wheat prices look pretty negative on the chart. We had a double top last week and now we’ve been trending lower this week for the most part. Technical indicators also pointed down. Wheat prices from a chart and technical perspective look pretty negative. The next chart support level would be $6.82. That’s about 8-10 cents below where we closed today. The next level of support the double top in the $6.61-$6.67 level. We would not be surprised to see wheat prices enter that type of range as we move through the next week or so.