Grain markets closed sharply lower, in fact, near record losses in today’s trade.
Grain Market News
D6 (Ethanol) RIN Value
You can see the concern regarding the biofuel discussions when we look at the D6 ethanol RIN values. They were trading up $2 earlier. Yesterday $1.48 and today trading as low as $1.23. Certainly, the market is concerned about at least the discussions taking place regarding renewable fuel and the renewable fuel standard.
D4 (Bio Diesel) RIN Value
When we look at D4 bio diesel RIN value they have also collapsed, going from over $2 down to $1.60 at yesterday’s close and likely lower today as well. RIN value collapsing as the marketplace starts to question whether or not the Biden Admin will made changes to the Renewable Fuel Standards.
Grain Market News
U.S. Drought Monitor
The drought monitor continues to expand. You can see the severe drought conditions in the northern Plains and drought conditions across much of the northern corn belt.
U.S. Drought Monitor Class Change
A map that shows where the drought class has changed. Over the last week we’ve seen the drought get more significant or more severe in the northern belt, northwestern belt, and northern Plains. The only place seeing improvement is out in the eastern seaboard. This is expected to change over the next week but nonetheless at this time drought is still expanding.
24-Hour Observed Precipitation
There were some rains that fell overnight. Southwest MN through a strip in western IA did get some rain and got up to 1” of rain. But these rains were very isolated and only encompasses a very small portion of the corn and bean belt.
14-Day Observed Precipitation
The two-week observed precipitation includes those rains from southwest MN into western IA but you can still see large areas of the central U.S. corn and bean belt are in desperate need of rain and the extends into the Plains states as well.
High Temps Wednesday 6-16-21
The heat was extreme in the Plains yesterday. Not only in the 100’s but well into the 100’s across the Plains states. In the eastern belt in the 70’s and upper 80’s were considered quite favorable.
7-Day Precipitation Forecast
Today’s precipitation forecast shows 1” or more in much of the U.S. corn and bean belt over the next 7 days. Those rains will be very beneficial if they fall in portions of the northern and central belt. Unfortunately, if this forecast is correct it will leave much of the Plains from northern Plains into the southern Plains in a relatively dry trend and that is what the market may focus on beginning next week.
6-10 and 8-14 Day Forecast
The longer-term forecast shows non-threatening weather with below normal temperatures for the bulk of the U.S. corn and bean belt and above normal precipitation in the bulk of the U.S. corn and bean belt. The only exception would be in the far western areas where we start to see heat building again in the Plains states in the 6-10 and the 8-14 day forecast and we do see some dryness starting to develop in the northern Plains but the heart of the belt looks to have mostly favorable weather over the next couple of weeks.
July Corn Chart
Corn prices collapsed today, down the 40-cent limit sitting right on chart support. Due to the fact that there were traders that wanted to sell corn down 40-cents but it was locked limit, we could open up the overnight session lower to allow any final sales to be made in the early overnight session. At this time prices have gone down to test chart support. If that does not hold than the $6.02 spike low from May would be the next target for the July corn chart.
July Soybean Chart
We’ve had to reconfigure this chart as the market continues to press lower. Massive, in fact, unprecedented losses in the soybean market today. Outside of delivery period, I’m not sure we’ve ever seen a loss of $1.18 in one day in the soybean market. The market is now into an area where we were consolidating back in Jan through early April with chart support at the $12.82 level from some price lows earlier in the year. Nearby July soybeans prices have now fallen $3 since last week.
July KC Wheat Chart
Wheat prices also sharply lower taking out the lows established in May which put $5.59 the next target if this market can’t find support very soon. We do believe corn, beans, and wheat are below fair value given the current fundamental outlook but that was not a factor in today’s trade. Today was all about liquidation and “get me out” orders at any price.