Closing Market Comments May 24, 2021

Today’s Prices

Grain prices finished lower today as the U.S. weather outlook remains mostly non-threatening into the first of June.

Grain Market News

14-Day Observed Precipitation

Over the past two weeks most of the corn and bean belt has seen pretty good rain. There’s been a pocket in the northwestern belt that has missed out on the rains in northeastern SD and western MN. The eastern belt for the most part has seen lighter rains but that is good news given OH was behind in planting. This has allowed them to finish up planting. Now they’ll need some rain going forward.

14-Day Precipitation: % of Normal

The northwestern belt is still well below normal. Eastern NE, IA, and into northern IL has also been below normal for the last two weeks while portions of the eastern belt have received little to no rain over the past two weeks. We have gotten rain and not a lot of rain is not needed at this point with the crop just emerging but the below normal precipitation will come into play if the forecast starts to turn more threatening.

7-Day Precipitation Forecast

If the forecast is correct, 1-2” will fall across almost the entire U.S. corn and bean belt. If this forecast verifies it would put corn and bean crops in very good shape for the most as we head into June.

6-10 and 8-14 Day Forecast

The 6-10 and 8-14 day forecasts are non-threatening. Average to slightly above average temperatures in the 6-10 day and average to slightly above average in the 8-14 day. Precipitation average to mostly above average in the 6-10 day and about average in the 8-14 day as well. Overall, we view the forecast as non-threatening as long as they verify.

Grain Market News

Corn: Weekly Export Inspections

Corn had 68 mb inspections this week. We only need 60-61 mb per week to reach USDA’s forecast. Corn exports have been running well ahead of USDA’s target and we expect that to continue at least for the next 4-6 weeks. Corn exports are on a pace to exceed USDA’s target.

Soybean: Weekly Export Inspections

Soybean inspections have been very disappointing. Again, a record larger Brazilian crop has taken over as the global supplier. This isn’t a surprise. We expected this to happen and even though our exports are running very low, we are currently 60% above the year ago pace. USDA is projection exports will be up by 35% so we should have no problem reaching USDA’s estimate.  

Wheat: Weekly Export Inspections

Nothing to write home about with 21 mb. We need about 30 mb weekly to reach USDA’s export forecast and there’s only about week and a half left in the marketing year for wheat. It appears at this time exports should come in fairly close to USDA’s current estimate.

Cattle on Feed

The cattle on feed report came out on Friday and cattle on feed as of May 1st up 4.7% from the year ago level. The trade was expecting it would be up 3.9% so a little more cattle on feed than expected. That was viewed as lightly negative for cattle prices but lightly supportive for feed demand and this was not a major factor for our grain markets today.

July Corn Chart

Corn prices have carved out a range over the last week, week and a half and it’s a similar range to where we consolidated briefly on the way up back in late April. That range shows chart support at $6.29-$6.33. Overhead resistance at $6.84 and today’s close at $6.57 very close to the middle of that range and anything within this range and anything within this range seems to be fair game in the near term. Technical indicators are not extremely oversold but they have leveled off over the last week as prices have consolidated.

July Soybean Chart

Soybeans have made another new low down to $15.06. We’ve been watching the $14.90 level as a major level of chart support. There was a double bottom in April on prices at $14.90. Our 40-day moving average and our uptrend line all coming into play in that area and that should provide solid support going forward. Today’s low at $15.06, just 15 cents above that major chart point. Soybean technical indicators are now moving into the oversold range. This is not a place to be making sales in soybeans with prices coming to chart support and technical indicators overbought, now is the time to be patient and wait for the next bounce.

July KC Wheat Chart

Wheat prices are in a steep downtrend off of the highs posted, a double top at $7.41 back in April. Prices have now reached the downside target at $6.08 where we have double bottom from the Jan-Feb timeframe and technical indicators are zero. This is not a place to be making sales in wheat. We think this market could very easily turn around and trade back towards initial overhead resistance between $6.61-$6.67. We just need a little bit of friendly news to get the market turned around.