Closing Market Comments August 11, 2021

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Today’s Prices

Grain prices finished mixed today as neither the bulls or the bears are willing to push prices to far in either direction ahead of tomorrow’s USDA crop report.

Grain Market News

90-Day Precipitation % of Normal

Overall, the drought areas run in an arch from Chicago down to Kansas City. North and west of that line we’ve seen drought conditions and soil moisture shortages. East and south of that line we’ve seen much better conditions. There are certainly pockets in the northwestern belt where rainfall has been adequate and crops are probably in very good shape but that would be the exception in the northwestern belt. In the eastern belt there are some pockets of dryness but overall, the eastern belt has generally seen adequate rainfall.

14-Day Observed Precipitation

We’ve seen some pretty good precipitation in an area from eastern SD down all the way through much of IA, MO, and southern IL. We’ve also seen some pretty good rain in the southern and western Great Lakes region but we also need to point out there have been some areas that have been missing out on the rains. Specifically the northern Plains, portions of the western Plains, portions of the Delta and even an area in the eastern belt.

High Temperatures Tues 8-10-21

Hight temperatures yesterday in the upper 80’s to low 90’s across most of the corn and bean belt. Temperatures have been gradually heating up. These temperatures probably not damaging if you have adequate moisture but if your experiencing dry soils then temperatures in the 90’s certainly going to be causing stress. The only severe heat was down in the southwestern Plains.

U.S. Radar

Today’s radar shows some rains in WI, most of that not hitting farm country and some additional rains in portions of the eastern belt. Most of the central and western belt, and Plains is dry as of this afternoon.

7-Day Precipitation Forecast

The forecast does show some pretty good rains in the eastern belt. Very little in the central belt and northwestern belt and just some scattered showers down in the Delta. This clearly won’t be enough rain in areas where its dry but the forecast is not overly threatening. It’s just less than idea.

6-10 and 8-14 Day Forecast

The 6-10 day and 8-14 day forecast continue to indicate above normal temperatures but we’re starting to see better precipitation hinted at in the northern Plains and central belt in both the 6-10 and 8-14 day forecast in the U.S. models. Bottom line is that past weather has provided mixed influence. Overall, even though weather is very important it is not providing decidedly bullish or bearish news at this time and that has resulted in prices chopping back and forth in a choppy range.

Grain Market News

U.S. Yield and Production

U.S. Ending Stocks

World Ending Stocks

Weekly Ethanol Production

Ethanol production slipped down to 986 barrels/day. That is the lowest level going back to mid-May and was seen as somewhat disappointing for corn prices today. With 3 weeks left in the marketing year our year-to-date ethanol production is up 3.2%. USDA projecting it’ll be up 4.1%. It’s likely USDA will leave its ethanol estimate unchanged in this report and wait for the final numbers and any minor adjustments in the September report.

Weekly Stocks of Fuel Ethanol

Stocks of fuel ethanol did slip lower based on the lower production, 22.287 mil barrels is up 12.8% from last year but still well within the range of ethanol stocks that we’ve seen in previous years, prior to Covid.

December Corn Chart

Corn prices did post the highest price in over a week at $5.61 but we remain well within a sideways range that’s been in place for about a month. It’ll be interesting to see if USDA can produce bullish or bearish news that would push us outside this sideways range. The higher prices today do give the chart a little bit of an upward bias and the technical indicators are pointed upward as well, hinting that prices may want to work towards the upward end of our trading range. But this is strictly chart and technical analysis and certainly some of tomorrow’s crop report will trump some of the chart and technical signals based on USDA’s numbers.

November Soybean Chart

Soybean prices are also trying to work gradually higher but within the overall range that has been in place for over a month. Slightly higher trend on the charts has allowed technical indicators to turn higher as well. From a chart and technical perspective this market could have some additional upside potential in the near term but do keep in mind we have a crop report coming out tomorrow morning at 11am.

September KC Wheat Chart

KC Sept wheat prices are in an uptrend. The last couple of days have challenged the highs from last week up in the $7.19 range. Technical indicators are overbought so we need to see some additional friendly news coming into the wheat market to keep this rally going.  

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