Grain prices were lower across the board today as the U.S. weather forecast looks mostly favorable for the next 7-10 days and possibly the next 2 weeks.
Grain Market News
Weekly Ethanol Production
Looking at today’s ethanol production chart we can see that big increase in ethanol production up to 1.032 mil barrels per day. We haven’t seen exceeded 1 mil barrels per day over the past 12-13 months. Certainly a big ethanol production number and very encouraging for corn use.
Weekly Stocks of Fuel Ethanol
Stocks of fuel ethanol increased just slightly but for all practical purposes were left about unchanged at very low levels. This is additional supportive news for the corn market with a big increase in production and virtually no increase in ethanol stocks. The ethanol news certainly helped the corn market stabilize and rally back during today’s trade.
Grain Market News
30-Day Observed Precipitation
The southern belt has had adequate rain while the northern belt has had much less than normal rainfall.
30-Day Precipitation % of Normal
As a % of normal, we’ve had above normal rain in portions of the central and southern belt while the northwestern belt into the northern Plains have been very dry and that does extend into the southern Lakes area of MI and WI as well. It’s these areas in the red that have had less than 25% over the last month that are in most need of rainfall soon.
7-Day Precipitation Forecast
Good news for U.S. farmers in the northwestern belt is that most of that area that needs rain does have rain in the forecast. Now if you’re in NE maybe you’re not getting as much as you’re hoping for and that may also be the case in IA and southern MN. But if the forecast is correct, much of the northern Plains and into the southern Canadian Prairie could see 1-2” over the next 7 days. Some areas that are too wet in portions of OH look like they’ll be drying out over the next week. Overall, we view the precipitation pattern as mostly favorable.
6-10 and 8-14 Day Forecast
As we look a little further out, the 6-10 day shows normal temperatures and the 8-14 day continues to show a progression of cooler temperatures in the northwestern belt, about normal in the central belt and remaining warm in the southern and southwestern belt. Precipitation looks to be mostly above normal for most of the belt for the 6-10 day and the 8-14 day forecast. We view this forecast, if it verifies, as quite favorable for U.S. corn and bean crops.
USDA Topsoil Moisture
This map shows topsoil moisture and highlights that dry area. Areas that have more than 50% short to very short soil moisture include MN, ND, and SD and that extends into the southern Canadian Prairie as well. IA and the far northern belt, WI and MI are also much drier than normal while the southern belt into the Plains is in pretty good shape when it comes to topsoil moisture.
USDA Topsoil Moisture vs 10-Yr Avg
When we compare the topsoil moisture short to very short and what is average over the last 10 years. MN is 51% short to very short and 9% would be average. So much drier than average in MN. The same is true for ND and SD. IA is drier than normal but not as dry as MN and the Dakota’s. And WI and MI very dry compared to what is normal for this time of year. OH, IN, IL, and south are in pretty good shape with soil moisture close or above normal for this time of year. It’s clear to see that for the moment the biggest issues are in the northern, northwestern belt, and into the northwestern Plains. This is no surprise. We see it in our drought monitor. We see it in our topsoil moisture and we also see it in our rainfall map. Again, not a surprise. Just a different way to look at topsoil moisture.
July Corn Chart
Corn prices were down sharply this morning in the July contract, down 20 cents at one point but turned around and closed unchanged. Unchanged is not impressive close but we did rally back nicely from sharp losses this morning in the July contract. Now we’ll have to see if we can get some follow through tomorrow. We currently have overhead resistance at $6.84 on the July chart with support at $6.29-$6.33 and today’s close put us very close to the middle of that range. Weather will determine if we push higher towards resistance or pushed lower towards chart support.
July Soybean Chart
Soybean prices down sharply today. They were down 50 cents at one point, turning around closing about 35 cents lower. It was still a disappointing day with the short term trend still pointed towards in beans with the technical indicators pointed downward as well. Old crop July corn may have bounced back nicely but July soybeans did not, keeping the chart in a downtrend at least in the short term.
July KC Wheat Chart
Wheat prices are in a sharp downtrend and have been for nearly two weeks. We made a low this morning at $6.19. Wheat prices did rebound and closed at $6.33 so they did close 14 cents off the daily low but were still sharply lower on the day. Technical indicators are extremely oversold, about as oversold as they ever get and therefore this is no place to be making sales. We can’t rule out prices moving a little lower but wheat prices are again getting undervalued and extremely oversold from a technical perspective and this is no place to be making sales.