Today’s Prices
Grain prices finished mostly lower as the weather forecast continues to show signs of improvement for next week meaning cooler temperatures and maybe a little bit better rain.
Grain Market News
14-Day Precipitation
Some were surprised that crop conditions didn’t fall further in Monday’s crop report from the USDA and this map may help explain why current crop conditions didn’t see a larger decline.
We did see some very beneficial moisture over the last couple of weeks in portions of northern Missouri and into the eastern belt as well as northeast Iowa into northern Illinois, even portions of central South Dakota, north central Nebraska into southwest Minnesota.
At the same time there was areas that missed out on the rain like central Minnesota, portions of the Dakotas, central Iowa into portions of eastern Nebraska, and of course the area that’s easiest to see if the central and southern plains into the Delta region.
High Temperatures
Yesterday high temperatures, a large area of the central and southern plains saw temperatures in the 100s.
I have even isolated an area in southern Kansas, central Oklahoma into north Texas where temperatures yesterday were 110-115.
Now this is not the heart of the belt but nonetheless whether its corn, sorghum or any other crop in that area that’s trying to grow, 110-115 is simply too hot and going to cause serious crop stress.
The good news is that’s not the heart of the belt, the heart of the belt saw temperatures in the mid and upper 80s in the eastern belt, low to mid 90s in the western belt, and primarily in the 80s in the northwestern belt.
Current Conditions
Current conditions show little to no rain in the US corn and bean let for the third day in a row.
Temperatures will rise into the 100s in the southern plains, Delta region, and even the southern portions of the belt.
At the same time temperature in the upper 80s low 90s may not be ideal but not overly threatening for the heart of the U.S. corn and bean belt.
7-Day Precipitation Forecast
The forecast models continue to add a little more moisture each run.
We now have a quarter to a half inch in much of the central and western belt, a half to an inch over much of the central and eastern belt, with maybe an inch to an inch and a half in the southern lakes.
Unfortunately, the southern plains, portions of the central plains, and into the Delta still looking at virtually no rain as the high-pressure ridge continues.
If we put that high pressure ridge on the map, monsoonal moisture coming out of the southwest and the 4 corners region will possibly be allowed to work its way to the north and east around the ridge and that’s what could give us better rain over the central and eastern belt as we move through the weekend.
Temperature Outlook
Looking at the map of our 6-10- and 8-14-day temperatures, it shows that our high-pressure ridge could remain further to the south than what was projected earlier in the week and that could allow for better moisture to work its way up.
The market has been down the last couple days on ideas we will see a little bit of better moisture.
Predicted Soil Moisture
If the forecast is correct, today through the next 2 weeks through August 3rd, would show portions of Iowa and Illinois seeing improved soil moisture and that may also include portions of Nebraska, northwest Iowa, and even portions of Missouri.
Unfortunately, not everyone will see that improved moisture.
This map does show potential for spotty precipitation, we could lose soil moisture in portions of Iowa, Indiana, Ohio, and then certainly continuing across the southern plains into the delta.
Grain Market News
GRACE
The indicator shows tremendous dryness that has developed in most of Europe form Spain and France through Germany, Poland, and even Italy and Ukraine.
The right side is the vegetation health index compared to a year ago as of July 15th and we can continue to see that dryness over much of Europe and that’s why we have such concerns regarding their crop potential.
Weekly Ethanol Production
Ethanol production did improve from the week prior up to 1.034 million barrels per day last week and that’s just shy of the level needed to reach USDA’s current corn use target.
When we look at our year-to-date ethanol production its up 6.7% from a year ago, USDA is estimating that corn use for the ethanol industry would be up 6.8.
So, we are very close to being right on track.
Weekly Stocks of Fuel Ethanol
Despite the increase in production stocks actually declined slightly to 23.553 million barrels.
This is still a relatively high level of stocks but it’s not burdensome, overall today’s weekly ethanol report was considered lightly supportive for the corn market.
September Corn Chart
Corn prices have been extremely choppy for the last few weeks going up and down.
We currently have significant chart support down at the 5.66 level, that was the low posted about 3 weeks ago with initial overhead resistance at about 6.25.
Right now, the market seems to be consolidating in the lower end of that range.
September Soybean Chart
Soybean prices have a similar pattern to corn where we have been choppy but seem to be consolidating near the lower end of the range.
We have chart support at about $13, the low from about 3 weeks ago, initial overhead resistance just shy of $14 our high from early Monday morning.
Further overhead resistance up around $14.40.
September KC Wheat Chart
Wheat prices also extremely choppy, down sharp up sharp and so on.
Wheat also looks to be consolidating near the lower end of the range with chart support around $8.20-8.30, overhead resistance initially around 9.20 with further resistance around the $10 level.
We believe the marketplace and traders in general are waiting for further weather development to determine if the U.S. corn and bean cops will be getting bigger on favorable weather or shrinking smaller on threatening weather.
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