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Grain prices finished higher today as the forecast continues to look threatening offering hot, dry conditions to the western belt.
Grain Market News
High Temperatures Monday 7-19-21
Recently the forecast has verified. Better rains and cooler temperatures have been forecasted and we did receive that last week. And then they talked about heat building in the northern Plains and we’re already seeing temperatures in the 100’s in eastern MT and western Dakota’s and 90’s across the western and northwestern Plains. That heat will gradually be working to the east and to the south over the next 7 days.
7-Day Observed Precipitation
Any areas in blue or white have missed out on the better rains. Those are the areas that would most quickly start to see crop stress if the current forecast verifies. The biggest area of dryness is in the northern Plains and far northwestern belt but there are other pockets, in and around the belt as well.
U.S. Radar 7-20-21 at 12:45pm
Today’s radar is almost rain free for the U.S. corn and bean belt. Just a few showers and sprinkles are up in central and northern MN and in eastern MT.
7-Day Precipitation Forecast
The forecast shows very little rain for most of the Plains, even into the central Midwest including almost all of IA and IL, only scattered light showers at best. And again, if this forecast verifies crop stress will start to increase again.
6-10 and 8-14 Day Forecast
One of the more bullish items is the 6-10 and 8-14 day forecasts show a continuation of above normal temperatures through the next 2 weeks and below normal precipitation for the next 2 weeks as well. It is this expected forecast that is especially threatening for U.S. crops.
Grain Market News
U.S. Corn Crop Condition
This year’s crop condition is in yellow and is a little bit below last year shown in red. This year’s conditions at 65%. A year ago at 69%. The slight improvement in crop conditions over the last couple of weeks puts us near the middle range for crop conditions over the past 20 years. But if the weather forecast is correct, we’ll likely lose 1-2% next week and then another 2-3% the following week. The spread between last year’s rating and this year’s rating is likely to get wider and wider. That would leave the trade to believe this year’s yield would struggle to reach trendline and would likely be below trendline yield if the forecast verifies and crop conditions decline.
Corn – Change in G/E Rating
U.S. Soybean Crop Condition
U.S. Soybean crop rating at 60% G/E was up 1% from last week but it’s still 9% below the year ago rating. Similar to corn, soybeans are very likely to see a 1-2% decline next week followed by a 2-3% decline the following week. And again, that’s based on the current forecast verifying over the next 2 weeks. Our spread between this year’s rating and last year’s rating would widen out further, leaving the market very skeptical of reaching USDA’s trendline yield and would likely start penciling in a yield below trend.
Soybean – Change in G/E Rating
December Corn Chart
Corn prices are in a long-term uptrend but they’re in a sideways, choppy intermediate trend while the short-term trend has turned up. Today we did post a new high for corn, keeps the short-term uptrend intact. We’re trading above all of our major moving averages and the technical indicators are pointed upward as well. The chart and technical indicators tell us that this market is likely to fill that gap that was left two weeks ago which would take prices up to the $5.73 level which is only 6 cents from where we closed today. If weather remains threatening and we can push through that gap area, $6.11 becomes the next target on the Dec chart.
November Soybean Chart
Soybean prices are in a long-term uptrend that is still intact. Intermediate term trend is sideways and very choppy this summer while the short-term trend is pointed upward. The technical indicators still have room to move to the upside as well. Soybean prices are trying to challenge the $14.23 high. We closed at $13.88 today so there’s still about 30-35 cents of upside potential before we reach our next level of overhead resistance.
September KC Wheat Chart
Wheat prices are in a long-term gradual uptrend. The intermediate term trend is sideways while the short-term trend is sharply higher. We did post a new high for the move at $6.74 on the Sep chart and it does look like the wheat market may want to test the consolidation area between about $7.00-$7.25 that was posted back during April and early May.
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