Grain prices finished lower for the second day in a row on the potential for increasing tension between China and the US and a forecast that isn’t ideal but less threatening.
Grain Market News
Corn Crop Condition
The corn crops held steady at 61% good to excellent, that is just slightly below the 20-year average and 1% below last year.
The US corn crop condition would hint at a yield slightly below trend.
Corn Change in G/E
We saw 8 states that improved, mostly in the eastern corn belt and in the delta.
We saw 2 states held steady and 8 states decline including Ohio going down by 4% points.
States decline offsets states that have improved leaving the US rating at 61% good to excellent unchanged from last week.
Soybean Crop Conditions
Soybean conditions improved for the first time this growing season 1% to 60% good to excellent which is the same as last year and at or just a fraction below the long-term average.
Next week crop conditions are likely to decline by maybe 1-2% and that could pull us below both last year and the 20-year average.
At this time the US soybean crop condition rating is hinting at a yield that would be slightly below trend.
Soybeans Change in G/E
Soybeans had 11 states improve while only 5 states declined including Iowa down by 2 percent which offset the Illinois improvement of 7%.
The US rating improved by 1% going up to 60% good to excellent.
Yesterday’s high temperatures saw temperatures in the upper 90s and the 100s from the Mexican border up to the Canadian border.
But the bulk of the heat was in the plains and therefore avoided the heart of the US corn and bean belt.
The eastern belt mostly in the mid and upper 80s, while the central belt was in the mid-80s to mid-90s.
Bottom line is temperatures are somewhat favorable in the eastern belt, lightly stressful in the central belt, and extremely stressful out in the plains.
24-Hour Observed Precipitation
The past 24 hours we had one stripe of rain that basically went through Illinois, not the entire state, but went through the central portion.
In fact, down in portions of the east central Illinois are there was an area that had 8-12 inches of rain over the last 24 hours.
That is too much rain in any area, but there were areas that had 1-3 inches and that was beneficial.
Unfortunately for the central belt into the northwestern belt into the plains only a few scattered showers.
Temperatures were already in the 90s in the western half of the belt with 80s mostly in the eastern belt, and we should see a lot of upper 90s even 100s in the western belt and certainly in the plains where crop stress is going to increase
The eastern belt should remain mostly favorable.
The rains in Illinois are continuing, most of those rains have been drifting almost south, so the areas that had rain are getting more while areas that missed out continue to miss out.
Topsoil moisture as of July 31st did have some improvements like Illinois, Indiana, Ohio, Pennsylvania, and down in the delta.
The central belt had some slight drying like Minnesota, Iowa, and then in the western belt North Dakota, South Dakota, and Nebraska all seen drying.
Soil moisture did improve slightly from 43% short to very short last week to 38% short to very short this week.
U.S. Topsoil Moisture
As of July 31st, we are at 38% short to very short which is a slight improvement from last week at 43%.
This compares to 39% last year, so similar, and just slightly above the long-term average.
We do believe if the forecast is correct soil moisture is probably going to be in that 44-46% short to very short and that will be like what we saw last year as well.
7-Day Precipitation Forecast
The eastern belt could get anywhere from 3 quarters to an inch and a half the next 7 days, the central portions could get a quarter to 3 quarters, but very little or no rain is expected in the plains.
The plains will see significant stress developing or increase and then stress could continue in portions of Minnesota, Iowa, and Missouri.
The 6-10 day forecast continues to call for above normal temperatures and that continues in the 8-14 day.
It may not be as hot as the previous forecast but still looks to be above normal.
Along with that we have below normal precipitation for the western half of the belt in the 6-10 day and most of the belt in the 8-14 day.
Below normal precipitation does not mean 0 precipitation, but it means on average we will see less than average rainfall.
September Corn Chart
Corn prices have been very choppy, going back to the month of June we fell sharply, rallied, fell sharply, rallied, fell again, rallied last week into Friday, and now we are setting back again.
Bottom line is we are carving out a range between 5.60-6.60.
Friday’s disappointing close with lower prices yesterday and today does have the chart turning downward in the short term. Technical indicators have turned lower as well.
September Soybean Chart
Soybean prices have been choppy going down and up multiple times.
The chart has turned lower over the last couple days which has hooked the technical indicators lower as well.
Soybeans had broken through our 10-20 day moving average and now we have corrected down to that level which should be a good area of support.
We will see if over the next couple days if the level around the $13.50-13.80 can continue to hold.
September KC Wheat Chart
Wheat looks to be trying to form some bottoming action, we believe that is going to continue but remain choppy in the short term.
We do believe that wheat prices globally are under valued and that this market as we move through the summer and into fall is likely to retest the $10 level at a bare minimum.
Even though wheat prices are not exploding, this is no place to be making sales.
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