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Today’s Prices
Grain markets finished lower today with a better than expected crop rating for soybeans providing some bearish input.
Grain Market News
High Temperatures Monday 8-2-21
Yesterday’s high temperatures still show non-threatening, mostly upper 70’s and low 80’s across the heart of the U.S. corn and bean belt. About the only heat worth mentioning was in the far northern Plains where 90’s were common.
14-Day Observed Precipitation
Over the last two weeks, areas in yellow would have 2” or more. So, we have some areas that have seen some pretty good precipitation over the last couple of weeks. It has been spotty but anywhere in yellow is probably sitting in pretty good shape at least for now. Blue and white areas have missed out on rains over the past couple of weeks. Those are areas where crop stress is likely taking place at this time. Areas in green would be somewhere in between. They probably need rain but maybe ok for the moment. The lighter greens are just 0.5-1.0” over the last two weeks while darker greens have seen 1-2”. Bottom line, precipitation has been very spotty over the last two weeks. Some areas seeing stress and needing rain immediately. Other areas in pretty good shape at least for now.
U.S. Radar
Today’s radar at midday shows no rain across the U.S. corn and bean belt and that looks like they’ll be the case for most of this week.
7-Day Precipitation Forecast
The 7-day precipitation forecast has added a little bit of rain in the northcentral portion of the belt with MN, IA, WI, and northern IL could see 0.25-0.75” and WI may see a little bit more.
6-10 and 8-14 Day Forecast
The longer-term forecast shows above normal temperatures in the 6-10 day and above normal in the 8-14 day forecast with precipitation above normal in the eastern belt and Great Lakes region for both the 6-10 and 8-14 day forecast. The longer-term map is still hinting at dryness out in the southern U.S. and Plains in the 6-10 day and the northern Plains in the 8-14 day. This forecast may not be ideal but we don’t look at it as overly threatening especially when you consider the fact that IA would get in on some better rains.
Grain Market News
U.S. Vegetation Health Index
This map shows the U.S. vegetation health index and it compares this year on July 29th versus one year ago. It’s clear to see the dark brown where crop conditions in the northern Plains and far northwestern belt far below last year but it’s also worth noting that the central belt and even portions of the east belt see vegetation health as below normal. You have to look into MI and OH, the deep south, and the southwestern Plains to find vegetation health index better than a year ago at this time.
Corn Crop Conditions
The U.S. corn crop dropped by 2% and is 10% below the year ago rating, 62% this year versus 72% a year ago. One thing we do want to point out is that last crop conditions were very good late July and early August last year and then fell consistently all the way down to 60% G/E by mid-September due to late season dryness and the derecho.
Corn Conditions by State
Soybean Crop Conditions
Soybeans were a different story. Crop conditions actually improved by 2%. That was a surprise to use and the trade as well. We have a similar scenario a year ago where crop conditions were very strong in late July and into August before sliding all the way into the middle portion of September due to the derecho on August 10th and late season dryness a year ago.
Soybean Conditions by State
U.S. Topsoil Moisture
This year we’re 39% short to very short as of this week’s update from USDA. That’s not too far from average but it is the driest we’ve been for soil moisture since the drought of 2012 but we’re nowhere even close to 2012 when we were at 82% short to very short as of early August. This year just 39% short to very short.
U.S. Topsoil Moisture Chart
This chart shows the same topsoil data in chart form. In 2012 as of late July/early August we were over 80% short to very short. This year we’re 39% short to very short and it is interesting to see that back in early May when the market rallied to the spring highs we were starting off with extremely dry conditions for early spring. Soil moisture improved as rains fell in late May and the market fell as well. We had another dry spell and crop moisture dried down in early June, we had another big rally in the market as the trade started wondering if we had another 2012 in the making. That didn’t happen and we actually got some decent rains in late June/early July. That also was accompanied with a market fall and now we start to see soil moisture dry again. If the forecast is correct with this week dry we’ll probably be about 45% dry to very dry next week. The lines with green dots produced record yields for both corn and soybeans. Those years had soil moisture better than average in July, August, and into September. This year may not be a disaster but we’ve certainly experienced short moisture than the years we’ve had record yields.
U.S. Conditions Map
The crop conditions that are less than 40% G/E exist in ND, SD, and MN for corn and soybeans. In corn there is no state that shows crop conditions in the 40’s or 50’s G/E. They’re either very disappointing like the Dakota’s and MN or they’re near average in light green but in the eastern corn belt, crop conditions 75% or better G/E. Similar scenario in soybeans, we do have KS and MO somewhat disappointing with the best conditions primarily in the Delta area. It’s very clear to see where the drought is most severe and crops are struggling the most as well.
December Corn Chart
Corn prices have been chopping sideways and we have a pennant formation that has been in place. We are noticing the market is starting to develop a choppy sideways range and a fairly narrow range. Much less volatile than we saw earlier in the summer when the market was questioning if we were going to have a severe drought. Now as we move into August it appears we’re not going to have a severe drought in the U.S. corn and bean belt as a whole even though the northwestern belt is struggling.
November Soybean Chart
Similar situation in that we’re starting to develop a more sideways range and certainly less volatility than we saw earlier in the summer where we saw much larger moves. We’re still seeing a volatile and choppy market but the moves we’re starting to see have tamed down compared to what we saw earlier in the summer for two reasons. We’re now at a point we know we won’t run out of old season and we’re getting far enough in the growing season that we may not have an ideal crop but we are avoiding a major disaster like we saw in 2012.
September KC Wheat Chart
Wheat prices are an exception. They have exploded into new highs on loss production in the U.S. spring wheat belt, Canadian production losses, significant losses look like in Russia’s crop and even Brazil, who is not a large producer, has seen a significant freeze in a portion of its wheat belt. It’s the U.S. and global losses that’s allowing prices to surge to the upside. That has the charts clearly in an uptrend with prices now in a consolidation area that was saw in the April/May timeframe.
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