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Grain prices finished mixed today as it has been an up week but the market taking some profit in corn ahead of the weekend.
Weekly Price Summary
Grain Market News
High Temperatures Thursday 7-15-21
Near term weather has been quite favorable. Temperatures yesterday mostly in the 80’s with upper 70’s across the upper belt. This would be slightly below normal. and quite favorable for a crop that’s about to be pollinating in corn.
14-Day Observed Precipitation
In addition to the seasonal temperatures we’ve had recently, we’ve also had good rains across a big area of the central U.S. corn and bean belt. That is also going to give us a little bit of a cushion if it gets hot and dry next week. The exception would be the blue areas where they’ve seen less than 0.50” of rain. The green areas might develop stress if the heat and dryness last for more than 4 or 5 days.
30-Day Observed Precipitation
When we take a look at the 30-day precipitation map, areas in green are where its exceptionally dry. But its also worth noting the pink areas you see, primarily MO and IL, southeast IA, and parts of IN and MI. That pink area is 10-15” of rain. The grey areas within the pink are 15” plus and we’re hearing standing water is a big issue in portions of MO and central IL.
U.S. Radar 7-16-21 at 12pm
This afternoon’s radar shows the front from northern portions of AR into the eastern corn belt. That will continue to push to the south and east, down into the Delta and deep south tomorrow. Once that front pushes through for the most part, the rains will have ended in the northwestern belt and an extended stretch of 7-10 days of dry and warmer weather is projected and that is what has the market somewhat concerned.
7-Day Precipitation Forecast
We can see that dryness showing up on the 7-day precipitation map. MN, IA, MO, and IL are not looking for any rain and that extends into the eastern Dakota’s as well. That lasts through the next 7 days.
6-10 and 8-14 Day Forecast
The maps for the 6-10 day show a lot of heat in the northern, northwestern belt. And that continues into the second week of the forecast along with dry conditions in most of the belt over the 6-10 day and dry conditions extend into the belt in the 8-14 day. It may not be completely dry but generally warm to hot temperatures and less than normal rainfall could be an issue if it extends through July and then we’ll have to see if it extends into August.
Grain Market News
U.S. Corn Yield
USDA’s current corn yield projection is 179.5 bu/ac. Yes, that is trendline yield but it is all an all-time record yield. That’s about 3 bu/ac above the previous record. Good crop potential is certainly in-line in many areas but there have been enough issues with both drought and flooding, we think the 179.5 bu/ac is extremely unlikely.
U.S. Soybean Yield
USDA is projecting 50.8 bu/ac and that would not be a record. The record was set 5 years ago at 52 bu/ac. Soybeans still had the potential to produce a good crop given the flowering and pod setting stage is coming up in late July and August. We’re not saying 50.8 bu/ac isn’t possible but we would have to have awfully good weather for the rest of the year to produce at 50.8 bu/ac yield.
December Corn Chart
Corn prices continue to be in an uptrend. Although today we did close lower, that was somewhat disappointing. It was just enough to make the technicals turn a little. It wasn’t a clean break to the downside, but turning them more sideways with today’s disappointing close. Bottom line, we’re right in the middle of our trading range. If we get bullish weather, we cannot rule out a pullback to the $5.00-$5.25 range. But if weather looks threatening next week, up in the $6.00-$6.25 range is certainly possible. This week prices were trading in the middle of that range that’s been in place all summer long. Prepare for markets to be sharply higher or sharply lower come Sunday night and Monday morning based on the most recent forecast.
November Soybean Chart
Soybean prices did break out above a pennant formation today. We didn’t close above so it was a little bit of a mixed signal. Bottom line, beans are also trading near the middle of the summer range that’s been in place going back to April and May. This allowed beans to pull back towards the lower end of the range, $13 or a little lower on bearish weather. Back up to $14.50 on bullish weather and as we mentioned, we’re somewhat in the middle of that range the last few days as the trade waits to see updated weather maps going into the weekend.
September KC Wheat Chart
Wheat prices continue to move higher. The extreme drought in the U.S. northern Plains that is devastating our spring wheat and durum wheat combined with Canadian issues as the U.S. drought extends into southern Canadian Prairies which is the heart of Canadian wheat growing. Now this week we’re adding some challenges in Russia where they’re 15-20% harvested and yields are much more disappointing than expected. Some analyst believe the Russia crop is significantly below USDA’s current projection. All combined allows the wheat market to be in a sharp uptrend with technical indicators supporting that. The next objective would be the $6.69 highs that were posted about 3 weeks ago.
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