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Grain prices finished mostly higher today as there as some follow through to the upside following yesterday’s bullish USDA report.
Weekly Price Summary
Grain Market News
U.S. Corn Yield
This chart plots the U.S. corn yield over the last 45 years. USDA was projecting 179.5 bpa a trendline yield. They’ve lowered that by nearly 5 bpa down to 174.6 bpa. This year’s yield is by no means a disaster. It is above the previous two years and would be a little more than 2 bpa short of the record yield produced 4 years ago at 176.9 bpa.
U.S. Soybean Yield
The U.S. soybean yield at 50 bap is very close to trendline. USDA was projecting 50.8 bpa. So at this time the soybean crop is not projected to be a disaster. Fairly close to trendline and a couple bpa below the record set 5 years ago.
Grain Market News
High Temperatures Thurs 8-12-21
Yesterday’s high temperatures show a cool front that is starting to push south and in fact, that cool front produced rain showers from the eastern belt through portions of the central and southern Plains as it moved southward yesterday. North of that line temperatures were pleasant. South of that line temperatures were hot.
7-Day Observed Precipitation
Last weekend and earlier in the week we had pretty good rains in the northern and eastern portions of the belt. And as that frontal boundary sunk to the south over the last day or two we started to see some better rains in southern NE, KS, MO, and into IL as well. Bottom line, some areas received very good rains this week but other areas like central IN, southwestern OH, central portions of IA, the northern Plains and central Plains all had that missed out on rains and some significant heat providing crop stress in those areas. With this in mind we look for crop conditions to be steady, maybe just slightly lower in next week’s report from USDA. Keep in mind, we typically do see crop conditions slip a little bit lower as we move through mid summer.
U.S. Drought Monitor
The most recent drought monitor shows severe drought and if we draw that line that arches from Chicago down towards KC, north and west of that line is where drought is some prevalent. South and east of that line for the most part has pretty good soil moisture although we mentioned parts of the Delta are starting to dry out.
7-Day Precipitation Forecast
The forecast shows some pretty good rain down in the OH Valley. Also portions of the central Plains. Up in the northern Plains more of a mixed bag. Some areas may miss out while areas of the Red River Valley of the north could see an inch of rain next week. Most of this rain expected to begin in the Wed/Thurs timeframe.
6-10 and 8-14 Day Forecast
The long term map continues to indicate above normal temperatures in the 6-10 and 8-14 day but precipitation looks like it could be improving for the bulk of the U.S. corn and bean belt with above normal precipitation expected in both the 6-10 and 8-14 day. In some cases crops have already lost significant yield potential but rains would certainly help with some of the later filling crops.
Global covid-19 weekly cases are shown in the red, weekly deaths are in white, and weekly doses of vaccines administered is in green. There’s been a significant increase in new cases and that is mostly due to the Delta variant. We’ve also seen an increase in deaths globally over the past few days. Vaccines are still strong globally and that will hopefully slow the spread going forward. On the right side shows the U.S. data and cases have exploded to the upside over the last 3-5 weeks with the Delta variant the primary reason. Deaths have increased a little and weekly doses of vaccines have declined partially due to a large portion of the U.S. population already being vaccinated although we’re starting to see a little increase in vaccinations again as the Delta variant increases. Bottom line the markets will be watching this data and certainly the Delta variant is causing some interruptions to the U.S. and global growth outlook but nonetheless we do expect growth to continue into the 2022 year which would be good news from a demand perspective.
December Corn Chart
Corn prices had an inside day meaning we didn’t take out yesterday’s high and we didn’t take out yesterday’s low. From a chart perspective the bulls are happy we were able to hold onto yesterday’s gains while the bears will note, we’re still about 20 cents off yesterday’s highs. Bottom line, the trend in Dec corn is an uptrend after the breakout to new highs yesterdays. Technical indicators, because we’re 20-cents off yesterday’s highs, still chopping somewhat in the middle range. Overhead resistance would be at $5.94, yesterday’s high and then the early July highs at $6.11. Significant chart support now exists down in the $5.50 range and that’s 15-20 cents below where we closed today.
November Soybean Chart
Soybean prices although we did rally to a new high for the move yesterday up to $13.69, we’re still stuck in the same sideways range that has been in place for about 5-6 weeks. The short-term trend is trying to turn higher. Technical indicators have turned higher. From a chart and technical perspective following today’s strong close, it does look like soybeans might want to trade into the upper end of the recent range in the lower $14 range. We’d need a little bit of friendly news but the chart and technicals do look pretty good.
September KC Wheat Chart
Wheat prices have exploded into new highs, $7.56 for a new high again today. The fundamental outlook for both the U.S. and global wheat supply and demand remains supportive or friendly for prices.
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