Closing Market Comments June 10, 2021

Today’s Prices

Grain prices finished mixed to mostly higher following USDA’s June crop report.

Grain Market News

U.S. Ending Stocks

World Ending Stocks

South American 2021 Production

Corn Balance Sheet

Old crop ending stocks were lowered due to an increase in ethanol and exports. That lowered new crop beginning stocks resulting in lower new crop ending stocks. Today’s report was considered supportive for corn.

Soybean Balance Sheet

USDA reduced crush and that raised ending stocks for old crop. That number carries over to the new crop year increasing new crop ending stocks. That was seen as a negative item in today’s report.

Wheat Balance Sheet

USDA raised exports which lowered ending stocks which resulted in lower new crop beginning stocks. Production in the new crop was increased but feed demand was also increased. Final new crop ending stocks ended up lower as expected.

Grain Market News

High Temperatures: Wed June 9th

This map looks very similar to what we’ve seen for about week now and that is extremely high temperatures.  Mid to upper 90’s across the northern belt and northwestern belt with a large area of 90’s across much of the central and northwestern belt, including the Plains.

7-Day Observed Precipitation

Over the past 7 days we haven’t seen much precipitation at all in the central Plains or central belt. We’ve seen some good rains in far northern Plains and in the OH Valley down into the Delta. But in the central, northwestern belt, and the central Plains there has been virtually no rain over the past 7 days.

7-Day Precipitation Forecast

The 7-day precipitation forecast shows a 0.25-0.75” of rain across the northern and central Plains. Unfortunately, if the forecast is correct the central belt would expect very little, possibly no rain over the next 7 days. The rain you see on this map is primarily an event coming through later today and tomorrow and if that rain doesn’t develop, the forecast this weekend into next week looks very dry.

6-10 and 8-14 Day Forecast

The 6-10 day forecast still looks warm in the central and western belt, cool to the far east. The 8-14 day warmer in the central and western and cooler in the far east. Precipitation looks very dry for the entire belt in the 6-10 day and that continues in the 8-14 day. Again, this forecast is threatening and therefore the rains that are possible over the next 48 hours because critical to not only crop development but also to prices.

U.S. Drought Monitor

The drought monitor that was released today shows expanding drought conditions in the northern belt and northern Plains. The areas of biggest concern for U.S. crops run from about Detroit to Chicago across the IA/MO border into NE. Most of the areas north of that line are very dry and need additional rain.

U.S. Drought Monitor Class Change

Yellow and tans show areas where drought has expanded so much of the northern belt and northern Plains saw drought expansion. The exception would be the western Dakota’s into MT where they got some rain but the vast majority of the best saw dry conditions expand in the drought monitor in this week’s report.

July Corn Chart

Corn prices are in an uptrend. Today’s push to new highs for this move to $7.17 keeps that uptrend intact and our technical indicators look very good as well. From a chart and technical perspective, no sign of topping action yet in the corn market. The next objective on the charts would be $7.35 and that would easily be obtained if the weather forecast remains threatening.

July Soybean Chart

Soybean prices are very mixed. It looks like we’re starting to develop a sideways choppy range. The market trending higher in late April through early May, and then fell sharply and then it’s been rallying over the last week or so but over the last couple of days it started to fall again. The soybean market remains very choppy. The long-term trend is still an uptrend. That hasn’t been broken but the move we’ve seen lower this week has certainly turned the short-term trend down. As of today’s close, prices are sitting right near our 10, 20, and 40-day moving averages. We’d like to see this level hold if the market is going to maintain its uptrend.

July KC Wheat Chart

Wheat prices also chopping back and forth over the last week to week and a half. Today’s close was a solid close. The overall trend does remain upward and the technicals look good as well. No sign of topping action in wheat but we haven’t pushed to new highs like we did in corn. We believe wheat will be mostly a follower to the direction of the corn market. If corn does rally on threatening weather, wheat would have an easy time challenging the $6.61-$6.67 level. And then from there, the market will start to discuss whether or not the double top at $7.41 is a potential target. But first we have to reach the double top that was posted earlier in the year in the $6.61 to $6.67 range.