Closing Market Comments August 25, 2021

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Today’s Prices

Corn and soybean prices closed higher today as chart and technical signals are looking better.

Grain Market News

Weekly Ethanol Production

Ethanol production very disappointing at 933K barrels/day. That is the lowest going back to late March. There has been talk that demand for ethanol is falling but we primarily believe this is due to end users trying to do everything possible to hold off until cheaper new crop supplies become available.

Weekly Stocks of Fuel Ethanol

Some evidence of that shows up in the stocks of fuel ethanol. They’re down 3 weeks in a row and well below where they would typically be this time of year given the current level of gasoline consumption. We feel the same overall concept is true in the soybean crush and feed users where they’re trying to use every pound of grain possible and hold off until the new crop, cheaper supplies become available. And again, that is going to create tremendous demand when those new crop supplies show up from the field.

Grain Market News

High Temperatures Tuesday 8-24-21

One weather item that could be trimming back yields is some tremendous heat. This map shows yesterday’s highs and you can see a large area of 100 degree temperatures out in the central and southern Plains. In addition to that, a lot of mid to upper 90’s in portions of the eastern and southern belt. These temperatures are not only hot but well above normal for this time of year.

Normal High Temperatures Aug 24th

Normal high temperatures for Aug 24th in portions of eastern IA and northern IL are around 80 degrees, upper 70’s to low 80’s. They’re looking at temperatures 15-20 degrees above normal. Temperatures in KS and NE in the 100’s, easily 15-20 degrees above normal. The heat we’ve seen over the last 2-3 days combined with heat expected over the 2-3 days certainly going to trim a little bit of potential from crops where the rains have not fallen recently.

U.S. Radar

Portions of the far eastern belt are getting some rains this afternoon. Some scattered showers in northern MO and central SD. But the radar could really start to light up over the next 2-3 days as heavy rains could set in, in the northern belt.

30-Day Observed Precipitation

Over the past 30 days we’re starting to see better rainfall. Some of the driest areas are filling in but its awfully late in the year. Many farmers are telling that the corn crop may benefit a little bit but it’s getting late. But the soybean crop could benefit as the moisture will help the pod fill. There are still some dry pockets. Anything in green is going to be less than half of normal and we still have some fairly significant pockets of dryness that have not yet been filled in with rain.

30-Day Precipitation % of Normal

The 30-day precipitation % of normal shows central IN extremely dry, portions of southeast SD/northeast NE extremely dry, and portions of the central Plains extremely dry as well. Those are some areas where the extreme heat this week could be trimming off some bushels. Portions of ND have improved dramatically. Northeast SD/western MN, and northeast IA have improved. We certainly have some areas where better rains have fallen over the past 30 days. It’s this extreme mix of areas that have gotten rains and  areas that have missed rains that will prevent the U.S. crop from reaching a trendline yield.

7-Day Precipitation Forecast

The 7-day precipitation forecast shows that heavy rain in the northwestern belt and northern Plains. Along the IA, MN border 3-5” is possible over the next 7 days. We also want to point out the Gulf region where tropical activity could come in early next week and some areas could pick up 10-20” of rain along the Gulf Coast. Unfortunately, some of that rain could move right up the Delta and that could cause some problems. This will have to be monitored as well.

6-10 and 8-14 Day Forecast

The 6-10 day and 8-14 day forecasts show above normal temperatures for the next couple of weeks and precipitation above normal as well. It looks like a warm, wet spell coming for the central U.S. corn and bean belt. The precipitation will be mostly favorable unless we get heavy rain down in the Gulf Coast region.

December Corn Chart

Corn prices continue to look very good from a chart perspective. The short-term trend is turning up and the technicals are turning up as well. Plenty of potential room to the upside from both a chart and technical perspective.

November Soybean Chart

Soybeans also have a pretty good looking short term chart formation. Technical indicators look pretty good as well. From the chart and technical perspective, soybeans could have some additional upside potential as well.

September KC Wheat Chart

Wheat prices are consolidating. They haven’t seen the same type of bounce as corn and beans. With prices near chart support, technical indicators near oversold, this is no place to be making sales in wheat.

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