Closing Market Comments August 16, 2021

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Today’s Prices

Grain prices finished mixed today as the trade is interested to see what the ProFarmer crop tour finds out this week regarding yield potential and also what USDA says with its updated crop condition ratings later this afternoon.

Grain Market News

NOPA Crush

This chart shows the U.S. soybean crush for the past 6 years and you can see this year in yellow, significantly below last year in the light purple. We believe the majority of the reason the soybean crush is not because the lack of demand, in fact, the soybean crush margins are very good. Crushers would love to be crushing more soybeans if they could find available supply. Bottom line, due to extremely tight stocks, soybean crush is significantly lower than a year ago and that is why USDA lower the old crop soybean crush by 15 mb in last week’s August crop report.

Corn: Weekly Export Inspections

Corn inspections very slow at just 29.7 mb but we’re still on track to hit USDA’s target given the fact USDA lowered its corn export forecast is last week’s report.

Soybean: Weekly Export Inspections

Soybean inspections seasonally slow but at 10.2 mb that’s the largest number since mid-May, about 3 months ago. As U.S. prices have become the cheapest source of soybeans in the world, USDA soybean export inspections should continue to increase now through the new crop harvest. USDA lowered old crop soybean export estimates and that is somewhat of a surprise, given the fact we’re still running 42% ahead of the year ago level.

Grain Market News

High Temperatures Sun 8-15-21

Extreme heat in the northern Plains with 100’s across the Dakota’s into MT while the heart of the belt was primarily in the upper 70’s and low 80’s in the eastern belt and low to mid 80’s in the western belt. This is part of that mixed news where the heart of the belt looks pretty good from a temperatures perspective while the northern Plains continue to burn up.

High Temperature Forecast

Looking ahead, high temperatures for Monday forecasts extreme heat in the northern Plains while moderate temperatures primarily in the 80’s across the heart of the belt. Tomorrow looks to be somewhat of a repeat with more extreme heat in the northern Plains while 80’s persists in most of the heart of the belt.

7-Day Observed Precipitation

Over the past 7-days there has been virtually no precipitation in a large areas of the northwestern belt and northern Plains while a good share of the eastern belt has had very good precipitation with the exception of a dry pocket in central IN and west central OH. There has also been some dryness developing in portions of the Delta and southern Plains as well. We mentioned how temperatures were providing mixed signals. Also, precipitation providing mixed signals with dry conditions continuing to stress crops out west while good conditions persist in much of the east.

30-Day Observed Precipitation

We should see everything in tan or brown which would be 3-5” of rain over the past 30 days. Anything in green, less than 2” would likely be an area where crop soil moisture is short or we may be even be seeing stress at this time and there are some fairly significant areas where moisture is short and we may be seeing stress

30-Day Precipitation % of Normal

When we look at the same 30-day precipitation map as a % of normal, you can see that from Chicago over to KS City, north and west of that line mostly drier than normal. While east of that line we’ve seen some pretty good moisture. Keep in mind, USDA is projecting an all-time record yield for IL at 214 bpa for a state average.

7-Day Precipitation Forecast

Beginning late Thurs into Fri and Sat there is good rain in the forecast for the northern Plains. If this forecast is correct, it would be some of the best rains this area has seen for much of the summer. 1-2” of rain is expected across a good share of the Dakota’s, MN, western IA, and NE. That extends into KS and OK as well. Some permanent damage has already been done but certainly rain would certainly be beneficial.

6-10 and 8-14 Day Forecast

The 6-10 and 8-14 day forecast provide mixed influences. Mostly above normal temperatures across the heart of the U.S. corn and bean belt will keep crops pushing along from a maturity perspective but there are better rains, especially in the heart of the belt. IA, IL, IN all expecting above average precipitation in the 6-10 and 8-14 day forecast. We don’t see any major threats when it comes to strictly a forecast perspective. Again, we’ll have to monitor to see if this forecast verifies.

December Corn Chart

Corn prices broke out to the upside following the crop report last week on Thursday. But since then, prices have eased back but they’re still trading for the most part above the range that was in place the previous month. Corn does have solid support at the top end of our previous trading range. Our uptrend line comes into place as well so corn prices very close to significant chart support with technical indicators bouncing in a neutral range. Chart support comes in the low $5.60 with overhead resistance, last week’s report high at $5.94.  

November Soybean Chart

Soybean prices have been trending gradually higher over the last couple of weeks. That has the technical indicators pointed higher as well. The soybean market did not break out to new highs and likely, that is due to the fact soybeans did not get bullish news last week on Thursday. Soybeans have initial chart support around the $13.50 level with further support around $13 with overhead resistance currently coming in the low $14 range.

September KC Wheat Chart

Wheat prices exploded to the upside last week on Friday, posting a new high. Today was an inside day with prices not able to take out Friday’s high and not taking out last Friday’s low. Today action in the wheat chart does not signal anything other than a consolidating trade.

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