Closing Market Comments May 17, 2021

Today’s Prices

Grain prices finished mixed today with old crop higher on tight stocks and new crop lower on a favorable weather forecast.

Grain Market News

Brazil: 30-Day Observed Precipitation

Over the last 30 days the area in the safrinha corn growing region has numerous areas that haven’t received any rain

14-Day Observed Precipitation

Over the past 2 weeks much of the central and southern belt has received good moisture and should be in pretty good shape. There are a few isolated areas in east central NE that has missed out on the better rains but most areas in the central and southern belt including the Palins have seen pretty good rains. This is not the case in portions of the northern belt and into the northern Plains where many areas have only seen light rain over the last 2 weeks. These are the areas that need rainfall most desperately going forward.

14-Day Observed Precipitation: % of Normal

The 14-day precipitation as a percent of normal shows most of the central and southern belt with a little above or a little below normal. But as we mentioned, it’s the northern belt, northwestern belt, northern Plains that still needs rain to alleviate drought conditions.

7-Day Precipitation Forecast

Good news for farmers in the northwestern belt and northern Plains, expecting 1-2” of rain over the next week. Southern MN, SD, NE, and IA expecting 0.5-1.0”. This rainfall across the northern belt is not a tremendous amount of rain but it will certainly help with emergence and early growth.

6-10 and 8-14 Day Forecast

The 6-10 and 8-14 day continues to point towards mostly above normal temperatures and above normal precipitation. This would put U.S. crops in pretty good shape right after the first of June if this forecast will verify.

Grain Market News

Corn: Weekly Export Inspections

Weekly inspections for corn were very good again at 74.5 mb. That is well above the level needed to reach USDA’s export forecast. Corn exports remain quite strong.

Soybeans: Weekly Export Inspections

Soybean exports were nothing tremendous but they were up for the 2nd week in a row, up to 11.34 mb. That’s just a little below the level needed to reach USDA’s current estimate.

Wheat: Weekly Export Inspections

Wheat exports bounced back with some of the best exports we’ve seen in over 2 months. Today’s exports at 24.1 mb were a little below the level needed to reach USDA’s forecast but there are only a few weeks left in the marketing year and wheat is running pretty close to USDA’s target.

July Corn Chart

Corn prices have collapsed over the last week to week and a half. This collapse began last week when we did not get any bullish surprised from USDA in the monthly crop report. A favorable weather forecast that has been in place since last week has allowed prices to drift even further. One piece of good news for July corn is that the low last night at $6.33 but we closed at $6.52, 19 cents off the overnight low. Corn prices have overhead resistance in the $6.80-$6.85 range with chart support at the spike low in late April at $6.29. We think anything within this range is fair game during the course of this week’s trade which means we’re a little bit closer to the low end than the high end at least in the nearby.

July Soybean Chart

Soybean prices have also turned lower over the last few days, since the government report last week on Wednesday. Beans have held support at the spike highs from late April at $15.74. Overhead resistance would be at the contract highs at $16.67 with the next level of chart support at the $14.90 level. Weather forecasts will likely be the determining factor as whether soybean prices can hold at this $15.75 going forward.

July KC Wheat Chart

This is another chart that has collapsed over the last week and a half. Today’s low at $6.43 was the lowest prices we’ve seen going back to mid-April. Overhead resistance currently then at $6.67 and chart support at $6.08. We’re not necessarily forecasting $6.08. I think that would be difficult for wheat to fall that much further but we do need to point out that is a fairly important point on the chart.