Grain markets closing sharply higher today as the market re-focuses on weather and crop potential and away from some of the outside influences from yesterday.
No precipitation has fallen in large areas of the U.S. corn and bean belt over the past week and crop conditions are likely to fall lower on the extreme heat combined with the lack of precipitation.
Even looking at the two-week observed precipitation, you can see big pockets where very little rain has fallen over the past two weeks. These areas are certainly seeing significant crop stress given the extreme heat.
Thursday’s highs in the Plains well into the 100’s and those 100 degrees temperatures spilled over into IA yesterday as well. It’s this combination of dryness and tremendous heat causing tremendous crop stress on corn and beans.
The forecast shows good rains for the eastern belt and even portions of the central belt. Unfortunately, the Plains look like they could miss out on the best precipitation. Even in the central belt where 0.75-1.50” could fall, that’s not going to last very long if the heat returns.
Good news, there is no heat in the forecast at least through the balance of June. Generally, below normal temperatures are expected through the end of June. Good news for the central and eastern belts with above normal precipitation. The biggest concern for the moment would be the warmer temperatures in the Plains states which could extend into the western belt and dryness that looks like it could re-develop in the Plains states in the 6-10 and 8-14 day forecasts.
This weather map from the NWS shows calculated soil moisture compared to normal. As of June 17th tremendous soil moisture deficits across the north and northwestern belt and that’s expanding in the Plains as well.
The expected soil moisture change for the next two weeks shows good rains and increased soil moisture in the eastern belt. That will keep crops in good shape there but in the western belt and into the Plain states additional soil moisture decline despite some rain in the forecast. Our fear is that even though we could get some rain over the next week or so it’s likely not going to be enough especially if the ridge would rebuild in early July.
Corn prices have been extremely volatile over the last couple of months, big up moves and big down moves. We expect that to continue. We now have solid chart support at the overnight low at $6.29. We’ve moved up towards initial overhead resistance where our moving average converge and then further overhead resistance in the lower $7 range. Anything within this range is possible heading into next week based on rainfall totals and the weather forecast.
Soybean prices were in a free-fall yesterday seeing their largest loss in history in July beans, closing down $1.28. Today beans were up sharply but were still down sharply on the week. Beans now have major chart support at $13.23 with overhead resistance initially around the $15.00 level where the moving averages come into play with further overhead resistance at $16 where we have a short term downtrend coming into play.
Wheat prices down sharply yesterday, up sharply today. That puts chart support now at the overnight lows at $5.83. We’re getting close to initial overhead resistance around $6.20. If that can be broken it would bring $6.54 into play but first we have to break overhead resistance in the $6.20 neighborhood.