Grain markets closed mostly lower today on a forecast that continues to call for good rains next week.
Grain Market News
U.S. Corn Crop Condition
For the second week in a row crop conditions have fallen 4% from 72% last week down to 68% G/E this week. That’s an 8 % drop in the crop condition ratings in just 2 weeks and we went from a high rated crop 2 weeks ago to below average already this week. next week’s crop conditions are likely to fall another 2-4% in the G/E category and that would certainly put crop conditions below average for the 2nd half of June.
U.S. Soybean Crop Condition
This week was the 2nd week of soybean ratings and they fell dramatically. A 5% drop in the U.S. bean rating on a national average. That took the conditions from 67% to 62% G/E. The soybean rating, like corn, is below average for this time of year. The soybean rating will likely drop again next week, 2-4% and on chart it’ll show that the soybean crop will be rated well below average when we get to next Monday’s condition rating.
NOPA Soybean Crush
The NOPA report estimated the May soybean crush at 163.5 mb. That was the second highest on record for May but it was down from last year and was a little below expectations and was considered a little disappointing. But soybean oil stocks also came in below trade expectations so some mixed news from the NOPA soybean crush report today.
Grain Market News
High Temps Monday 6-14-21
Current conditions are still stressful in many areas. Yesterday’s high temperatures were in the 90’s in the western and southern belt with 100’s in the far west. Unfortunately, some of those 90’s are taking place in areas that are still extremely dry.
14-Day Observed Precipitation
Some areas in the central U.S. belt, in fact IA is somewhat the epicenter of recent dryness, and then another pocket in southwestern NE/northwestern KS and these are areas that are going to be experiencing the most crop stress if rain doesn’t fall soon.
7-Day Precipitation Forecast
The 7-day forecast gives you an idea why the market is down. The forecast calls for 1-2” in much of the belt over the next 7 days. Unfortunately, a lot of this rain doesn’t fall until the Sunday, Monday, and into next week. Farmers down in eastern AR/northern MS who have been inundated with 10-12” of rain over the last 2 weeks are hoping the tropical system doesn’t push into the Delta region where they’re suffering from flooded fields.
6-10 and 8-14 Day Forecast
The 6-10 and 8-14 day forecast also give you a hint as why the funds have been selling. It’s calling for below normal temperatures in both the 6-10 and 8-14 day with above normal precipitation. Commodity funds and investment managers looks at that as a favorable forecast as we move into the last half of June.
Predicted Soil Moisture Anomaly Change
But with the dryness that is still in place this week, the predicted soil anomaly shows that even though we’re expecting rain in some areas much of the central, western, and northwestern belt will see a loss of over soil moisture over the next two weeks. With soils already very dry this is not very promising. This market is going to be on pins and needles with every forecast going forward.
July Corn Chart
Corn price continue to trend lower off of the highs posted last week on Thursday. That’s been enough to turn the technical indicators lows so the charts and technicals are giving us no sign that the market has found a bottom at least not yet. Chart support initially comes in just below the $6.50 level with overhead resistance coming in a little over $7.
July Soybean Chart
Soybean prices also in a downtrend off last week’s high. Technical indicators pointed downward as well. The difference here is that the technical indicators are now entering into the oversold range. No sign of bottoming action but nonetheless soybeans are entering oversold conditions from a technicals perspective and entering some fairly significant chart support down around the $14.50 level. Soybeans currently have support in the $14.50 level with overhead resistance very close to the $16 level on the July soybean chart.
July KC Wheat Chart
Wheat prices also in a downtrend off the highs posted last week. Technical indicators have turned down as well. Similar to corn and soybeans, wheat is showing no sign of bottoming action. Chart support comes in down around the $6 level on the July chart with overhead resistance initial coming in around $6.40.