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Today’s Prices
We had a strong day higher in the markets lead by the wheat complex.
Grain Market News
Corn Export Sales
Corn exports sales for old crop came in at a net reduction of 115 tmt. On a weekly basis we need 456 tmt to reach USDA’s target.
Soybean Export Sales
Soybean had a net reduction. We were down 79 tmt. We needed a negative 22 tmt needed. The mount of sales that we have on the books is more than we need. We’ll have to see if some of those old crop sales get shifted into new crop or USDA may need to lower the number down the road because we’ll likely have cancelations down the road.
MN Precip May
NOAA reported the May Precip for Minnesota was 1.69”. that would be the lowest since 1980. We new conditions through the winter and actually starting last fall were dry but that was confirmed by NOAA with these May numbers.
MN Avg Temp June
The June temps warmed up and the average temp was 69.9 degrees. That is the warmest since 1988.
MN Precip June
In addition to the warm temps in June we also had a low amount of precip. The June precip came in at 1.83”. That’s the lowest going back to 1988.
MN Corn Condition
This graph shows the MN corn condition index. We take the different crop condition ratings (very poor, poor, fair, good, and excellent) and build an index by taking the very poor rating times 0, poor rating times 1, fair rating times 2, good rating times 3, and excellent rating times 4. The current index for Week 29 is at 214. This is the lowest the conditions have been for the week going back to 2007.
MN Topsoil and Subsoil
MN topsoil is currently at 81% short to very short and subsoil is 80% short to very short. This data goes back to 1995 and this would be the driest MN has been on the topsoil and subsoil going back to 1995. We know they were probably drier than this back in 1988 but we don’t have any data. This data is from NASS, the National Ag Statistics Service and this data comes out every Monday in the crop condition report.
MN Yield % Change from Trend
Across the bottom is the crop year and the left is corn crop index (crop condition). The blue line is the crop index plotted. The green and red are the topsoil and subsoil numbers. The one we want to focus on is the yellow line. The yellow line is showing how the final yield compare to the trendline yield. Where do we think MN yield will come in? We’ve identified a few years that we’re trying to compare to. In 2019 came in at 7% below trend. In that year the topsoil and subsoil moisture levels were nowhere near where they are this year. The other year we’re watching is 2014. In 2014 the final yield came in 11% below trend. And the other year is 1988 when the final yield came in 35% below trend. We don’t think the conditions, yet, warrants talking about a trendline yield coming in 35% below trend but honestly could we we see something in the 11-15% or maybe 20% because of the dry conditions and weather forecast, that is extremely possible. As we go forward, we’ll continue to talk more about our thoughts on where the state yields will come in and the national yield.
December Corn Chart
The corn chart has a downtrend line and up trending line forming a pennant formation. Where we have the trade that’s been consolidating a couple things stand out. The first level of support is the 10-day average at $5.54. Right below that is our second level of support which is the 20-day moving average in red at $5.50’2. And then as we look at the topside, we have a level of resistance at $5.73. That’s the area where our market is going towards if we continue to see these hot, dry conditions developing.
November Soybean Chart
We have a down trending pattern on the topside and an up-trending pattern, resulting in consolidating trade. So as we look at the technicals in soybeans, we have our first level of support at the 10-day average in green at $13.71. And then our first level of resistance above this would be the intersection with the downtrend line and depending on where we’d intersect that would likely put us in the $13.96 area. We can see we have some good support below us. We have some resistance above us. We continue to think as we go forward if the hot, dry conditions persist into August, we’ll see some additional upside potential in this market. In addition, we did have some support coming out of the bean oil market today. Anytime we get strength in bean oil or soybean meal that really helps give a boost to the soybean market.
September KC Wheat Chart
The upside leader today was definitely wheat. We had strong price action coming out of MN wheat and that’s because they’re trying to assess what’s going on with the crop in ND. In addition, overnight some of the analyst coming out of Russia did lower the Russia wheat crop by about 3 mmt. What wheat is trying to do overall is trying to price itself out of the feed ration. It’s not there yet. We still need to see some higher price action and we think we’ll see some going forward. On the resistance side, $6.74 would be the first level of resistance. We added in a Fibonacci retracement which is just a way to technically look at the market. We use the high at $7.45 and the low at $5.78 and we’re coming up to the 61.8% retracement of that distance from the high at $7.45 to the lower at $5.78. That level of resistance would come in at the $6.82 level. If we were able to break through the $6.82 level then that would open the door to take us up toward the $7.45 area.
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