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Grain markets closed sharply lower to limit lower across the board today as the weather models have gone cooler and wetter for the western belt.
Grain Market News
High Temperatures Sun 7-4-21
Today’s lower prices were a result of an improving forecast even though we had some stressful conditions over the weekend with heat and dryness in much of the western belt. This map shows the high temperatures from this past Sunday, July 4th and you can see 100’s across much of SD with 90’s across most of the northern and western belt.
High Temperatures Mon 7-5-21
This map shows Monday, July 5th and we saw temperatures moderating a little bit in SD, still some 100’s across the NE border but still, may mid to upper 90’s in portions of the western belt. If crops were in a location where moisture is short, crop stress likely increased in some of those areas.
7-Day Observed Precipitation
Looking at the 7-day observed precipitation you can see a big hole in the map where very little rain fell last week and if temperatures were in the mid-90’s that likely presented some crop stress. Good news for portions of SD where they have started to see some rains. Again, additional rains are forecasted for today and tomorrow and then another frontal system comes through on Friday. Crops in the eastern belt should be mostly in pretty good shape while additional stress felt in the western belt. This could result in crop conditions being about steady in this afternoon’s weekly update of crop conditions from USDA.
U.S. Radar 7-6-21 at 1:30pm
The U.S. radar as of 1:30pm this afternoon shows some additional rains falling in portions of those dry areas of the western and northwestern belt.
7-Day Precipitation Forecast
Possibly the biggest bearish factor today isn’t jus the fact that there is rain falling but the forecast is calling for 1-3”, even 2-4” of rain across much of the western belt including all of IA.
Predicted Soil Moisture Anomaly Change
Last week the maps were indicated drier soil moisture. The predicted soil moisture change for the next week, as of this morning, shows an improvement in soil moisture in the northwestern belt whereas Friday it was looking for soil moisture to decline. Quite a reversal from the forecast that was shown on Friday.
6-10 and 8-14 Day Forecast
The 6-10 shows below normal precipitation in the central corn belt and then more average in the second week of the forecast. Precipitation still shows IA being the dividing line from IA warmer and drier to the northwest, cooler and wetter to the southeast. Where this border line between the warm, drier and cooler, wetter ends up falling is going to be very important as IA right now is on the border of fairly good conditions and the possibility of additional stressful conditions.
Grain Market News
U.S. Corn Crop Condition
Last week, conditions for corn were down 1% at 64% G/E. That’s well below last year’s condition rating which is shown in red for the 2020 crop. As you can see as look at the last 20 years, 64% is below average for this time of year. Conditions in today’s report could be up 1 or down 1 but we’re guessing they’ll be about steady for the U.S. corn conditions in today’s weekly update.
U.S. Soybean Crop Condition
Soybean crop conditions were steady last week at 60% G/E and well below the 71% G/E last year. Our crop conditions are expected to be about steady around 60% G/E and that would mean crop conditions are below average for this time of year. USDA in next week’s July crop report will either leave yields steady or lower them. They will not be raising yields.
December Corn Chart
Corn prices at $5.39 on today’s close, down the limit but we are getting close to the lower end of the range. Somewhere between $5 and $5.25 appear to not only be good support on the chart but good fundamental support with tight stocks as well. We won’t rule out prices moving into that area but it would likely be an area to be a buyer of corn and not a seller of corn.
November Soybean Chart
Soybean prices were down sharply today, near limit down at the close and today’s low at $13 is also getting close to chart support which is down in the $12.40-$12.60 range. Using USDA’s most recent Supply and Demand, fair value for new crop beans would be something closer to $14 and yet we do believe USDA has room to raise demand for beans as well and therefore, we are not looking to be a seller following today’s break.
July KC Wheat Chart
Wheat prices also getting down to the bottom of their trading range and also getting down to a level that would likely be below fair value. That doesn’t mean they couldn’t slip a little bit lower but this is no place to be making sales in wheat either. Corn, beans, and wheat could all be approaching levels chart support over the next day or so with prices down likely down to or below fair value.
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