Closing Market Comments July 1, 2022

Today’s Prices

Grain markets finished sharply lower today on chart and technical selling, fund selling and liquidation, as well as the forecast that has quite a bit of rain in it for the heart of the belt.

Weekly Price Summary

Grain Market News

7-Day Observed Precipitation

Over the last 7 days we’ve seen very little rain in portions of the eastern belt, Delta, southern plains, as well as potions of the northwestern belt.  

Those dry pockets are likely being crop stressed based on some warm temperatures.

14-Day Observed Precipitation

We can see that the same areas in the 14-day are similar to the 7-day observed precipitation.

Certainly, those areas that have received very little rain are seeing crop stress like I said above.

30-Day Observed Precipitation

Looking out over the last 30 days, the month of June, we see a lot of color on the map.

That is good news, unfortunately anything that’s in green is less than 2 inches of rain.

Keep in mind that in June the average is an inch to an inch and a quarter per week across the entire belt. That means in the month of June we should be getting 4-5 inches.

With that in mind we see some pockets in the northwestern belt, Delta areas, as well as scattered areas in the eastern belt having crop stress.

30-Day Observed Precipitation % of Normal

Anything in tan is less than half of normal, so again a good share of the eastern belt, most of the Delta, as well as the northwestern belt.

The red areas have seen less than 25% of normal through June.

U.S. Drought Monitor

Those areas that have seen the lightest rains are starting to see some drought conditions develop in portions of the eastern belt, the Delta, and in the northwestern belt.

Drought Monitor Class Change

Last week we seen some significant development or expansion of the drought in the central U.S.

We expect that we will see more expansion in the drought monitor in next week unless we get big rains over the weekend.

U.S. Drought Monitor vs. Last Year

Last year we had virtually no drought in the central and southern U.S. corn and bean belt with major drought in the northern plains.

This year we see expanding dryness, not server yet, but expanding in the eastern belt down into the Delta and ongoing dryness in the northwestern belt.

Today’s Conditions

Low 90s across the southern and eastern potions of the belt today upper 70s and low 80s across the northwestern belt.

Keep in mind we will still add some degrees on top of this for the daily highs.

7-Day Precipitation Forecast

Our forecast shows rainfall, 1-2 inches across portions of the northern and eastern belt and also a big pocket of rain expected in northeast Kansas into western Missouri.

The rains would be very welcome in almost all areas and therefore the trade was negative today.

Temperature Outlook

The 6-10- and 8-14-day forecast looks similar to what we looked at all week long.

That is above normal temperatures expected for the first half of July with a ridge in the southern plains into the deep south.

That is expected to remain in place with ridge riding rains expected across the north, central, and eastern belt over the net 2 weeks.

Again, it is this type of forecast that has heavy fund selling in todays trade.

Soil Moisture Anomaly

You can see that almost the entire U.S. corn and bean belt was below average as far as soil moisture.

The exception would be a portion in eastern Oklahoma, western Arkansas, and also in the far northern plains.

The rains expected over the weekend and into next week are going to be extremely important for not only the crop for prices going forward.  

September Corn Chart

The corn market is in a free fall, we have fallen $1.38 in a 2-week time frame and prices now are below the level that they were at when Russia invaded Ukraine.

Technical indicators are extremely oversold and as we mentioned that doesn’t mean we found the bottom, but it does tell us that this market is in position to have a sharp up move if we got a little bit of friendly news.

Next week could be an extremely volatile week for corn prices.

September Soybean Chart

Soybean prices have been on a wild ride as well, falling sharply a week and a half ago and then late last week and this week rallying sharply before falling sharply since yesterday’s report.

Beans did rally up into the middle of the range, tested 20- and 40-day moving averages and then fell sharply.

September KC Wheat Chart

Wheat prices also in an extremely sharp downtrend, when Russia invaded Ukraine the wheat market rallied $4 over a course of 3 moths and now it has fallen $4 in about 1 month. We are pretty much right back where we started.

In fact, today’s prices down near $9 are actually below the level we were at when Russia invaded Ukraine.

The chart and is pointed downwards and the technical indicators are extremely oversold.

Questions or Comments