Closing Market Comments July 19, 2021

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Today’s Prices

Grain markets finished mixed today but giving back much of the overnight and morning gains on weaker outside markets.

Grain Market News

Crude Oil

Crude oil hit a high in early July at 76.98. Today’s low at 65.87. That means the crude oil market has fallen over $11/barrel in about a 2 weeks time.

Dow Jones Industrial Average

On Friday, early in the day the Dow Jones was at 35,090 virtually matching the all-time high posted back in May. Friday the Dow reversed and closed lower and then today massive losses, over 900 points at one time. Down to 33,741. The stock market has lost about 1,300 points from Friday’s high. The massive losses in the stocks market combined with massive losses in the energy market was enough to produce selling in the grains and taking away the weather related rally from overnight and early this morning.

Grain Market News

High Temperatures Sun 7-18-21

Yesterday’s high temperatures show the heat starting to build in northern Plains with upper 90’s in ND and MT but the heart of the U.S. corn and bean belt mostly in the 80’s yesterday.

14-Day Observed Precipitation

On the precipitation side, 1-3” of rain common across most of the central corn and bean belt. The exception would be up in the northern Plains and southwestern Plains where they missed out on the better rains.

30-Day Observed Precipitation

We can see that much improved rains with 4-5” common across most of the corn and bean belt. In fact, if there’s a complaint it’s excessive rains of 8-10” of rain in the pink areas and 15”+ in the purple.

U.S. Radar 7-19-21 at 1pm

Today’s U.S. radar does show some rain in far northeastern ND. Most of this precipitation is slipping off to the south and east but at least portions of the Red River Valley of the north could get a decent shot of rain with the showers coming through this afternoon. The rest of the corn and bean belt is dry as of mid-day today.

7-Day Precipitation Forecast

The 7 day precipitation forecast does show that drier forecast for all of the Plains, western belt, and even most of IL only looking for light rains for the next 7 days. This combination of lack of rain and hotter temperatures will quickly deplete soil moisture in many areas.

6-10 and 8-14 Day Forecast

The 6-10 and 8-14 day forecast are very similar to the maps from Friday which call for above normal temperatures for most of the U.S. including the corn and bean belt with precipitation being below normal for most of the belt, especially in the western belt over the next 2 weeks as well. This is concerning for U.S. crops but do keep in mind, we expect crop conditions will be improved this afternoon’s report due to favorable weather we’ve seen over the past couple of weeks.

North America Vegetation Health Index

This map shows the vegetation health index for the U.S. The left is July 15th of this year and the right is July 14th of last year. Items in yellow or pink are very low or poor vegetation health. Items in green and blue are very good vegetations health. We can see in the northern Plains, MN, and into the Canadian Prairie very poor vegetation health at this time. Whereas last year at this time vegetation health was pretty good across the northern Plains, in fact, it was pretty good across most of the U.S. corn and bean belt.

Veg Health Change from Last Year, Week 28

When we look at a map of vegetation health compared to a year ago, it shows that west of the MS River and into the Canadian Prairie has vegetation health much lower compared to a year ago. When you combine the lower crop rating versus a year ago and the lower vegetation health, it’s hard to image this year’s yields could reach trendline or above. In corn, trendline yields would be all-time record yields.

December Corn Chart

Corn prices are still in an uptrend but today was pretty disappointing with the market trading to a new high for the move earlier this morning at $5.67 but closing at $5.52, 15 cents off the daily high. One day doesn’t make a trend but today’s trade was disappointing. The pullback off the daily high was enough to turn the technical indicators somewhat sideways in mid-range.

November Soybean Chart

Similar situation in soybeans where we’re still in an uptrend on the chart but today’s trade was a key reversal to the downside. Made a new high at $14.80, turned around and close below Friday’s low. So from a technical perspective that’s a pretty disappointing performance today. And it was enough to hook the technical indicators as well. The bean market need some friendly news if we’re going to maintain the uptrend that’s been in place for about a month.

September KC Wheat Chart

Wheat also made a new high for the move today at $6.68 but closed at $6.52, 16 cents off the daily high. The chart still looks good for wheat although today’s trade was somewhat disappointing, and the technical indicators still pointed up as well. Wheat was able to challenge its previous high at $6.69 and now looks like its taking a breathier at least for the day, today.

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