Closing Market Comments August 27, 2021

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Today’s Prices

Grain markets finished mixed today with favorable rain in the northwestern belt providing some downward pressure but strong outside markets providing a little bit of buying.

Weekly Price Summary

Grain Market News

Crude Oil

Early in Aug we had a sharp pullback in the energy market, but this week energy surged higher. In fact, crude oil trading over $7/barrel higher than just a week ago. This is certainly supportive for our grain markets.

DOW Jones Industrial Average

The DOW fell sharply this week, but it rallied back this week and is sitting very close to the all-time high. And that is supportive for the outside markets and the financial markets. A strong economy generally considered supportive for the grain markets was well.

U.S. Dollar Index

The U.S. dollar index which was up sharply for the first two to three weeks of August, is down sharply this week with today’s U.S. dollar down sharply at the lowest level in over a week. Although it’s just one week, we’re down over 1% from where we were a week ago and so the U.S. dollar index is actually seen as supportive for the grain markets as a lower dollar supports better exports. Bottom line is that today’s comments from Central Bank chair Powell considered supportive for the outside market, negative for the dollar, and all of these are supportive for not only commodities but the U.S. grain markets as well.

Grain Market News

High Temperatures Thurs 8-26-21

High temperatures on Thursday in the 60’s in ND, northern SD, and northwestern MN. In the 90’s even the 100’s in the central Plains into the southern and eastern belt. In between the cool air to the north and the hot humid air to the south is where big rains have developed over the last few days. Southern MN, northern IA into WI specifically seeing heavy rain. We also want to note the heat ongoing from southern NE, eastern CO into KS is likely stressful for U.S. corn and bean crops in the central Plains. Temperatures in the low to mid-90’s most of this week in the southern belt, into southern portions of the eastern belt could be stressful as well. The cooler temperature and rains in the northern and northwestern belt likely seen as beneficial. Crop conditions could be steady or maybe improve a little bit next week but there will certainly be some areas that are still experiencing stress down in the south and southwest.

7-Day Observed Precipitation

Tremendous rains in the northwestern belt and northern Plains. Specifically ND, portions of SD, MN, and IA seeing some very good rains over the past 7 days. This should help stabilize crop conditions in some of the hardest hit drought areas. Unfortunately portions of southern NE, CO, and central KS missed out on the rain. Portions of the eastern belt also missed out on the recent rain as well as the Delta region. Declining crop conditions where the rains were missed and we saw heat and much above normal temperatures this week could offset the gains we’re expecting in the northwestern belt.

U.S. Radar

Today’s U.S. radar shows additional rains in the far northern belt but no rain in the central and southern belt. And again, these areas have missed out on some of the better rains this week and have had heat this week. We are likely to see declining conditions in the southern belt. Improving conditions in the northern and northwestern belt. We believe crop conditions are likely to be about steady. It’s possible they could improve slightly but again improvement in the northwestern belt could be offset by decline in the southern belt in next Monday’s weekly update.

7-Day Precipitation Forecast

The 7-day precipitation forecast shows somewhat more of the same of what we saw this week. Additional rains in the northwestern belt. Very little or no rain in the central and southern Plains and the remanence of what could be hurricane Ida could clip the southern portion of the eastern belt into the OH Valley and the rains would be very welcome there.

6-10 and 8-14 Day Forecast

Our long-term forecast calls for above normal temperatures in the 6-10 day and then cooling to normal/below normal in the 8-14 day. Precipitation looks to be above normal for the entire U.S. corn and bean belt over the next 2 weeks. We view the forecast as mostly non-threatening although we’ll have to watch for excessive rain in some locations.

December Corn Chart

Corn prices still look somewhat impressive from a daily perspective with a short-term uptrend in place and it’s enough to have the technicals pointed upward as well. We are sitting right up against all of the moving averages, 10, 20, and 40-day moving averages come into play but there is no sign of topping action from a chart or technical perspective.

November Soybean Chart

Soybean prices after turning higher early in the week, turning back lower over the last 2-3 days and that keeps our markets, for the most part, choppy and sideways in the lower portion of our recent range.

September KC Wheat Chart

Wheat prices are in an uptrend on the chart from a short-term perspective. They’ve also turned the corner on the technicals. This would hint at least at some additional upside potential possible based on chart and technical formation.

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