Closing Market Comments June 7, 2021

Today’s Prices

Grain markets finished mixed today, old crop losing out to new crop as the market shifts attention from tight stocks which was the leader, now looking at weather issues being the leader for new crop grain.

Grain Market News

High Temperatures: Fri June 4th

Over the last week and a half we’ve talked about the forecast becoming more threatening. Friday showed widespread 100’s in the Dakota’s and into northwestern MN.

High Temperatures: Sat June 5th

By Saturday the 100 degree temperatures were continuing into the Dakota’s and that extended into western MN as well with a lot of 90’s across the central and northern belt.

High Temperatures: Sun June 6th

Temperatures moderated a little bit on Sunday with the 90’s for the most part focused on the Dakota’s, MN, and into NE. Temperatures in the eastern belt down into the Delta primarily in the 80’s and they have adequate soil moisture so conditions for most of the eastern belt and Delta are quite favorable.

Forecast High Temperatures Thurs June 10th

We do want to point out the hot temperatures are expected to return. The forecast shows upper 90’s in to the 100’s for the western belt and Plains states similar to what we saw this past weekend. It’s also worth noting that the OH Valley and down into the Delta looks to have mostly favorable 80’s as we move forward. So the concern is primarily the central, western, and northwestern belt.

7-Day Observed Precipitation

Over the past 7 days we’ve started to see precipitation reduced. Most of the central, western, and northwestern belt received very little rain over the past 7 days. What’s worth noting, the driest areas had been in ND and adjacent states but over the past week, the heart of the belt portions of IL, much of IA and NE which are the three largest corn producing states has seen much less rain over the past 7 days.

14-Day Observed Precipitation

We should see about 2” of rain on any given week in June. Anything in blue is less than a half an inch so we certainly have some dry pockets that are now developing where they’ve had less than a half inch over the last two weeks. Even the light green will see sharply reduced soil moisture when temperatures are extreme like we’ve seen over the past 4-5 days.

7-Day Precipitation Forecast

The forecast does show a little bit better rain in the Dakota’s where ND could see some decent rain, SD possibly and that extends into the southern Canadian Prairie as well. That would be good news. It won’t be a drought breaker but it certainly would be good news while southern MN, IA, eastern NE, and much of the northwestern belt looks to only have 0.2-0.3” over the next 7 days. It’s also worth noting, the eastern belt should continue to see adequate precipitation in the OH Valley, eastern belt, and down into the Delta. The concern when we look at the markets is if we drew a line from central MI, through western IL, northern MO, and down into KS. This is the area we’ll be monitoring as we move through the next week. We’ll also have to monitor if the rains forecasted for the northern Plains materializes.

6-10 and 8-14 Day Forecast

The rains that are forecasted for the northwestern blet and northern Plains will be very important. The forecast shows above normal temperatures in the 6-10 and 8-14 day forecasts for those dry areas. Outside of the rain that may fall this week, a below normal profile is expected over the next 2 weeks. The rains expected in portions of the Dakota’s this week will be very important.

Grain Market News

Corn: Weekly Export Inspections

Corn export inspections dropped down to 55.6 mb. Down sharply from 82 mb last week. We’ll see if USDA makes a major adjustment in that number next week. Sometimes that happens following a week that seems lower than it should be. Bottom line, through March, April, May, and into June U.S. exports have been consistently running above the level needed to reach USDA’s export forecast and we need 59 mb per week to reach USDA’s estimate. This is the first week that’s been below that level going all the way back to February. It certainly appears that U.S. corn exports will end up running above what USDA is currently projecting.

Soybeans: Weekly Export Inspections

Bean inspections up a little from last week, 8.7 mb. Not a big number and below the level needed to reach USDA’s export forecast. April, May, and June is usually the slowest time of year for U.S. exports. That’s when new crop Brazilian supplies come online and take over global shipments. We do expect to see a seasonal increase in shipments as we move through the late June, July, and August timeframe. And it certainly appears beans are on track to reach USDA’s current estimate.

Wheat: Weekly Export Inspections

Since last week was divide between old crop and new crop, old crop exports were at 10.6 mb and new crop up around 15 mb. Not a bad week of export inspections for wheat but keep in mind, the old crop marketing year ended May 31st and wheat exports look like they’ll come in very close to USDA’s most recent estimate.

July Corn Chart

On the July chart prices surged to a new high for this move up to $7.06 which would clearly put $7.35 as the next overhead objective but we closed lower at $6.79, 27 cents off the daily high. Today’s close as very disappointing and this leaves our chart signals mixed. An overall uptrend is still in place with new highs but a disappointing close. Technical indicators are still pointed upward but following today’s disappointing close if we were to close lower tomorrow it could hook the technicals lower but for the moment, even though we had a disappointing close the chart and technicals are still pointed upward for July corn. Keep in mind, new crop December corn closed with double digit gains.

July Soybean Chart

Bean prices are also in an uptrend but we had a very disappointing close in old crop beans as well. Old crop beans closed at $15.60. That’s 63 cents off the daily high. The push to new highs today does leave $16.67 as the overhead resistance but it was a disappointing close and the bean market needs to rally fairly soon to prevent chart or technical signals from turning down. Today’s close at 63 cents off the daily high was enough to turn the short term technicals just a little bit to the downside. The chart and technical action was very mixed, a little bit of something for the bulls and the bears in today’s action.

July KC Wheat Chart

Wheat prices also posted a new high by just a penny but did trade to $6.54, taking out the highs from last week. That keeps the chart pointed in an upward direction. But today’s disappointing close at, $6.30 which was 24 cents off the daily high was a little bit of a negative. Bottom line, chart and technicals look pretty good but today’s poor close gives the bears at least something to cling to.