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Grain prices finished lower to sharply lower today as a macro sell-off across nearly all commodities and markets providing selling pressure throughout the day.
Grain Market News
These charts show the COVID-19 data. The global numbers show a steep increase in cases. Not quite as high but up in the same category as where we’ve been twice before during this pandemic. Global deaths are not as high in early 2021 and then again late in the spring but global deaths are still on the rise. Global vaccines have picked up but nowhere near where the U.S. is as a whole. On the right are U.S. COVID statistics. A tremendous rise in new cases and a very large portion of that due to the Delta variant. Unfortunately, deaths have increased as well. We’re nowhere near where we were at the first of the year but deaths have increased over the last 4-5 weeks. Vaccines have not risen dramatically but we have a large share of the population already vaccinated and therefore, we’re not going to see vaccine levels in the U.S. at the previous levels but we could see them continue to increase especially if people start getting a third shot or booster shot. Bottom line, COVID is expanding and this is the 3rd wave of expansions since the pandemic begin and it is creating concern within the global economic community.
When we look at a crude oil chart you can see crude oil has declined $14/barrels from nearly $77/barrel around the 4th of July to $62.50/barrel today. This corresponds with the increase number of Covid cases over the last 4-6 weeks.
U.S. Dollar Index
The U.S. dollar index affects the competitive of U.S. products on the export market. When the dollar index is rising, the cost of U.S. products aboard are higher. Therefore the rally over the last 2-3 months up to $93.50 is hurting, to some degree, the U.S. competitiveness of products for exports.
Grain Market News
Pro Farmer 2021 Crop Tour Corn Yield
Pro Farmer 2021 Crop Tour Bean Pods
U.S. Drought Monitor
The national weather service updates the drought monitor weekly and it was updated this morning. It shows drought conditions not only remaining but expanding in the northwestern belt and northern Plains.
U.S. Drought Monitor Class Change
This map shows the change from last week. Anything in yellow or tan show where drought conditions are getting worse. Anything in green or blue is where drought conditions are improving. With the exception of some showers by KS City and eastern OH. In the rest of the belt drought conditions either remained or intensify.
High Temperatures Wed 8-18-21
We start to see a pretty significant low pressure and cool air pocket in the northern Rocky’s. That’s producing a southwest flow with heat flowing up into the central and western Plains. This low will track it was to the east over the next few days. Temperatures won’t be as cool as they are in the Rocky’s but we will see a significant cool down. As that low moves to the east we’ll get a flow out of the Gulf providing moisture to the upper Midwest.
U.S. Radar 8-19-21 at 1:15pm
Today’s radar shows things pretty clear across the belt but that will change as the rains in the Rocky’s will move into the northern Plains tonight and into IA and MN throughout the day tomorrow and into Saturday.
14-Day Observed Precipitation
Over the past 14 days you would typically get about 2” of rain in the heart of the belt. Anything in blue is likely experiencing crop stress. Significant areas of IA, areas in central IN, and large areas in the Plains likely experiencing stress and even severe stress. We hear talk from some farmers that crops are likely losing yield potential on a daily basis until they receive rain.
7-Day Precipitation Forecast
The good news is there is rain in the forecast for the northern Plains and northwestern belt where 1-2” of rain could fall and 2-4” across the Canadian border. A little bit lighter precipitation in the eastern belt where 0.25-0.75” is expected to fall. Overall, if this forecast verifies we may see an opportunity for crop conditions to stabilize as we move into the end of Aug or early September but for next week we do believe crop conditions will decline.
6-10 and 8-14 Day Forecast
The 6-10 and 8-14 day forecasts show cooler temperatures in the northern region and into the Great Lakes. Unfortunately, we could see additional dryness developing in the northwestern belt or northern Plains. That is something that will need to be monitored and it makes the rains that are expected Fri-Tues very important. A forecast calling for cooler and a little bit drier we consider mostly neutral. Not adding bushels to the crop but not necessarily taking away a lot. The forecast offers a little for the bears and the bulls.
December Corn Chart
Corn prices were in an uptrend but that was broken today so we’ve reconfigured the chart to reflect that change. It does look like the market may be returning to a choppy sideways pattern.
November Soybean Chart
Soybean prices have been and remain in a sideways choppy pattern and we expect that to continue going forward.
September KC Wheat Chart
The wheat market is in a significant uptrend but we’re having a correction over the past 3-4 days. Wheat has come back down to major chart support. We’ll see if that holds over the next few trading sessions.
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