Grain prices closed sharply higher today on a combination of factors, rumors of Chinese buying, chart and technical signals and a less than favorable forecast.
Grain Market News
Corn: Weekly Export Sales
Weekly corn export sales for old crop sales were very good at 556 tmt. We only need 127 tmt to reach USDA’s forecast. It certainly appears exports are running well above USDA’s target and they’re likely to raise the export target in either the June or July crop report.
Soybeans: Weekly Export Sales
Weekly export sales for beans were very low at just 56 tmt but it is still double the level needed to reach USDA’s export forecast. We really don’t need much in the way of new sales to reach USDA’s export forecast. Right now we’re pretty much on track to hit USDA’s target. But if Brazil continues to ship extremely heavily off its record crop and they begin to exhaust their available supply, any new sales of decent size in the June, July, or August timeframe would allow us to exceed USDA’s total but as of today we’re somewhat on track to reach USDA’s target in beans.
Wheat: Weekly Export Sales
Wheat export sales came in at 30 tmt, virtually nothing but it is the end of the marketing year and new crop sales were 373 tmt, more respectable. At this point in a marketing year, its more important what is shipped versus sold because new sales won’t ship this marketing year anyway. Bottom line, old crop exports for wheat are running very close to USDA’s target and we don’t expect any adjustments for old crop wheat in the June crop report.
Grain Market News
NWS Active Alerts
This map shows the active watches and warnings alerts. For tonight there are freeze watches for ND, northern SD, northwestern MN, and that extends into the southern Canadian Prairie. This is not good news is an area that has already been struggling with drought on and off as we move through the spring and planting season. The other watches and warnings are tornado and flood alerts in OK, KS, MO, and IL.
3-Day Observed Precipitation
The greens are 0.5-1.0” and yellows are an inch plus. We saw some nice rains in portions of ND and SD, southern MN, NE, and scattered areas in IA. Now not everyone received rain but there has been rain in many areas and in some of those areas the rains will be very beneficial. We want to repeat that the current weather is pretty good but the market is looking ahead at what is coming down the road and some of the weather is less than favorable going forward.
U.S. Radar 5-27-21 1:15pm
Additional light to moderate rains are falling in the far northern regions of the belt along with some rains moving into IL and eastern portion of the belt. Plenty of rain falling this week with additional rains still in the forecast for the near term.
7-Day Precipitation Forecast
The heaviest rains are expected in the Plains and some of that rain will move east and northeast through the eastern belt and the OH Valley including the Delta as we move into the weekend. Up in the northwestern belt and northern Plains most of the rain has wrapped up and there is not much for additional rain in the northern areas over the next 7 days. This will be an area to watch to see if drought begins to build again in those areas.
6-10 and 8-14 Day Forecast
The 6-10 and 8-14 day forecast shows above normal temperatures in the northwestern belt, below normal precipitation. This is where we could see drought continue to re-build. There are still drought conditions in place but it could start to get more serious again. The 8-14 day forecast does show warmer temperatures in the north but maybe a little bit better precipitation in areas like MN and IA. Bottom line, the forecast is not as favorable as it has been over the past couple of weeks and this is just enough to trigger buying in today’s trade.
July Corn Chart
Corn prices limit down on Tuesday, down sharp yesterday morning but then recovered and up limit today at the close. This chart has made a significant turn in a very short period of time and its enough to turn our technicals indicators higher as well. At this point, both the chart and technicals are telling us this market could have additional upside potential. Our first upside target is $6.75, the highs posted late last week and then $6.84, a spike high from late April. This area isn’t necessarily the top of the market but it is certainly a location for the next potential target if the market does want to move higher as we move into tomorrow’s trade.
July Soybean Chart
Soybean prices also making a nice move to the upside today and it was enough to turn the technical indicators so the soybean chart and technicals also telling us there could be additional upside potential in the near term. The next level of overhead resistance would be $15.74. That is where we had a spike high back in April and that’s about 37 cents above where we closed today. As we mentioned this is not necessarily the high in the market, it’s just the next target on the chart.
July KC Wheat Chart
Wheat prices have exploded to the upside, rallying 41 cents off of yesterday’s low and it’s enough to turn our technicals upward off of extremely oversold levels. We have the same picture developing for corn, beans, and wheat and that is charts have turned higher and technicals have turned higher from oversold levels. So it looks from a chart and technical perspective that all three grains could see some additional upside potential but weather will be the key. Weather will be the driving factor not only tomorrow but into next week’s trade following the Memorial Day holiday. On the wheat chart the next upside objective is the $6.60-$6.67 level if we can get just little bit of friendly weather news.