Grain prices finished with huge losses today as USDA did not provide any bullish news yesterday and a number of factors came together to trigger heavy selling.
Grain Market News
7-Day Precipitation Forecast
The 7 day forecast certainly shows those wetter conditions. The entire U.S. central and southern Plains looking for moderate to heavy rain. The eastern belt is looking for moderate rains and down into the Delta looking for decent rain as well. If this forecast is correct, most of the U.S. corn and bean belt would be in very good shape as we move into the later portions of May. ND still looks drier than desired but they could still see a 0.20-0.50”. SD and southern MN not looking for heavy rain but 0.25-0.75” would certainly be helpful. Bottom line if the precipitation forecast verifies most areas would be in pretty good shape. IA and NE will need more rain going forward but this forecast doesn’t look threatening at this time.
6-10 Day and 8-14 day Forecast
Generally, a warm forecast for the U.S. If this was July above normal would probably be considered threatening but in May above normal temperatures are seen as beneficial. The precipitation map shows above normal precipitation in the Plains into the central and southwestern blet and that’s good news putting rain where its needed. The only area looking drier would be the eastern Great Lakes and the far eastern belt. Overall, this forecast looks quite favorable if it verifies.
Corn: Weekly Export Sales
Very disappointing corn export sales with not only a marketing year low but a net cancelation of 113 tmt as China cancelled 334 tmt and another 192 tmt was cancelled to an unknown destination. The cancellations easily outweighed new sales. The extremely high prices are taking a bite out of new export sales. We do have big sales on the books that we think will be shipped for the most part but the combination of cancellations and a lack of fresh sales disappointing here in the near term.
Soybean: Weekly Export Sales
Soybean export sales came in at 94 tmt. It was positive but a very small number and you can see a similar trend where soybean sales have been quite disappointing over the last month or so. Again, we believe this is evidence that the extremely high prices is causing world buyers to slow down their purchases or look elsewhere like Argentina or Brazil.
Wheat: Weekly Export Sales
Wheat exports sales where a market year low last week. This week was positive but virtually no new business. Wheat also showing signs of U.S. prices having rallied to a point that is trying to slow demand at least in the near term.
Grain Market News
U.S. Corn Supply & Demand
U.S. Soybean Supply & Demand
U.S. Wheat Supply & Demand
July Corn Chart
Corn prices after consolidating just before the crop report have fallen sharply. In fact, July corn is down 61 cents over the last couple of days. New crop Dec corn has fallen 85 cents this week. The long-term trend for corn is still up. The intermediate trend is still up but the short-term trend has turned down. Technicals have turned lower, there is no sign of bottoming action. The next level around the $6.60 type level and that’s about 10-15 cents below where we closed today. If the upward trend line does not hold, then the market might eye up the $6.29 spike low we saw about 3 weeks ago. Following the sharp break we’re not overly bearish on corn but in the short term further correction to the downside is certainly possible from a chart and technical perspective.
July Soybean Chart
Soybean prices also sharply lower today. Beans have very quickly fallen 92 cents off of the highs posted just yesterday. It’s enough to turn the technical indicators to the downside. Soybeans have come right down to chart support today at the trend line and the $15.74 level. But if soybeans cannot find chart support at today’s low, the double bottom from about 3 weeks ago at $14.90 certainly becomes a point to consider on the chart.
July KC Wheat Chart
Wheat prices have been hit extremely hard over the last 4 days, down 90 cents in just 4 days. Wheat prices rallied nearly $1 in 4 days in late April, chopped around, and now has fallen nearly $1 in 4 days. This is just evidence of the extreme volatility that we’re not only seeing now but we should expect more of volatility in the weeks and months to come. The hug drop in wheat prices has the technical indicators collapsing. There is no sign of bottoming action at least not yet. But when wheat prices have fallen 90 cents in just 40 days, we’re no longer interested in making sales. We’ll actually be looking for a place to re-own some bushels if the market shows signs of bottoming.