Grain markets were sharply lower today with corn leading to the downside on a mostly favorable looking weather forecast into early June.
Grain Market News
7-Day Precipitation Forecast
Heavy rains expected in the Plains with 2-4”, 3-5” of rain over the next 7 days. The eastern belt mostly 1-1.5” of rain and that would be beneficial. Even in the northern belt 0.75-1.5” of rain and that includes some of the dry areas of eastern SD and southwestern MN. Areas that might miss out would be the far northern Plains and the southeastern U.S. where dryness is building. The bulk of the U.S. corn and bean belt looks to have excellent rains over the next 7 days.
6-10 and 8-14 Day Forecast
Still no threatening weather in the outlook. Temperatures average to even slightly below average in the 6-10 day. Mostly average in the 8-14 day. Maybe a little cooler in the southern Plains and maybe warmer in the far northern Plains but overall, this is a pretty good temperatures forecast. Mostly above normal precipitation for the heart of the belt over the 6-10 and 8-14 day forecast. The only dryness right now is in the northern Plains, ND, MT, and southern Canadian Prairie. Otherwise, the forecast looks awfully good as we head into the first week of June.
Grain Market News
U.S. Corn Planting Progress
In yesterday’s weekly crop progress and condition report USDA put U.S. corn planting at 90% complete. That compared to 80% on average so well ahead of average with corn planting in the U.S.
Weekly Corn Planting Progress
If we look back a few weeks, we planted 29% of the nations crop at the end of April/beginning of May and since then we’ve continued to plant fairly aggressively. This week going from 80% to 90% and this is about 5% ahead of the 5-year average.
U.S. Soybean Planting Progress
In soybeans, we’re also planting at a very rapid pace. USDA stated that we’re 75% planted. That compares to 54% on average. So a very quick start to the planting season for the U.S. soybean crop. At 75% planted, compare to 2 years ago we were just 29% planted on the U.S. soybean crop. Certainly, corn and soybean planting has benefitted from mostly favorable weather.
Winter Wheat Crop Condition
Last week 48% G/E, down 1% to 47% G/E in yesterday’s weekly report. In the heart of hard winter wheat country, KS saw improvements and it declined in the Pacific northwest with white wheat crop in WA, OR, ID was enough to pull conditions lower.
July Corn Chart
Corn prices very disappointing. After starting out with an outside day up earlier this morning, prices turned around and collapsed, reaching limit down at one point today. Very disappointing. We felt prices might stay within this range which was up 20 cents or down 20 cents and today the market pushing sharply lower, down to $6.17. As prices move through last week’s low at $6.33 and then the low from late April at $6.29, multiple sell stops here hit pushing prices sharply lower on the day, most of it on fund liquidation and selling. Technicals now in the oversold range. There is no sign of bottoming action on the chart or the technicals yet but this is not a place to be making sales with the entire growing season ahead.
July Soybean Chart
Soybean prices also sharply lower today. They did recover a little bit off of the daily lows but nonetheless still a down day. Charts are still pointed downward for beans. Technicals are in the oversold range. Similar to corn, there is no sign of bottoming action yet from the chart or technicals but we are getting down towards major chart support. $14.90 was a double bottom in April. We have the 40-day moving average and up trending line all coming into play just below today’s low. Our thoughts on beans, now that prices have had a major correction, this is not a place to be making fresh sales.
July KC Wheat Chart
Wheat prices continue to be in a very sharp downtrend. New low today posted at $5.97. We pushed through the double bottom at $6.08 and that triggered additional sell stops and selling by the funds in the wheat market as well. Prices now approaching long term trendline support with technicals at zero. There is no sign of bottoming action on the charts yet but this is no place to be making sales in wheat. This market is not only oversold technically but undervalued fundamentally.