Closing Market Comments August 17, 2022

Today’s Prices

Grain markets finished mixed today, corn and soybeans trying to recover a little bit after 2 days of loss while wheat fell sharply on ideas of increased shipments from Ukraine.

Grain Market News

High Temperatures

Yesterday 8/16 this map shows up that the high-pressure ridge is slipping further to the south leaving Kansas and Nebraska much cooler than they have been in previous weeks.

Most of the heart of the US corn and bean belt in the low to mid 80s.

Current Conditions

Today’s temperatures mostly going to be in the low to mid 80s for the heart.

In fact, almost the entire US corn and bean belt will likely be in the low to mid 80s today.

The frontal boundary that’s been triggering those showers and thunderstorms in the western belt has slipped further to the south and that leaves most of the U.S. corn and bean belt dry at today’s midday.

3-Day Observed Precipitation

From southern South Dakota, northern Nebraska, through portions of eastern Nebraska, most of Missouri, and through western Iowa there were some very good rains.

Generally, 1-2 inches of rain fell in that area with isolated heavier totals.

The good news is that some of these heavier rains fell where they were desperately needed as drought was starting to kick into a higher gear and crop stress was severe.

Where the rain did fall, crops will now have an opportunity to stabilize over the next week or so.

30-Day Observed Precipitation

We can see that much of southern Minnesota, eastern South Dakota, northern and eastern Iowa, into some of the great lakes regions as well as southern portions of the eastern belt, Ohio, northern Delta all have seen very good rains over the past 30 days.

But much of the Dakotas remains relatively dry, a good share of Nebraska remains dry, as well as Kansas, and into the southern plains.

Anything in green is less than 2 inches which would be less than half of the normal Range.

We also see a pocket in southern and southeastern Iowa into west central Illinois that has missed out on rains.

30-Day Precipitation- % of Normal

We can see that parts of the heart of belt still need additional rain and that is true for portions of the Dakotas, as well as the central and southern plains as well.

Although we saw some very good rains over the past 3 days there are still numerous areas that did not get their problems resolved and that will leave question marks for the trade going forward.

7-Day Precipitation Forecast

The 7-day forecast shows additional dryness in the Dakotas, Nebraska, Kansas that could become a problem if we don’t get some rain.

The good news is the temperatures do not look to be excessive.

Some heavy and soaking much needed rains are expected in the southern plains in Oklahoma and Texas.

Temperature Outlook

Our 6-10 and 8-14 day don’t have much that has changed over the last couple of days.

Generally near normal temperatures for the heart of our corn belt, a little bit warmer to the northwest, little cooler to the south.

Same thing in the 8–14-day forecast.

Precipitation is about average across the cent5ral or heart of the belt, dryer to the north, wetter to the south in the 6-10 and 8-14 day.

U.S. Corn Yield

Anything within 5 bushels above or below trend would be considered close to average.

The last time we had a yield well above trend was 2009.

In last Fridays August crop report USDA estimated the US corn yield at 175.4, that just about 5 bushels per acre below trend.

U.S. Soybean Yield

Anything within 2-bushels of trend is considered something close to average.

The last time we saw significant deviation below trend was 2019, that was the year of extremely late planting and tremendous flooding.

Our record yield was produced in 2016 at 52 bushels per acre.

USDA is projecting this year’s yield at 51.9 which is just a fraction above trend.

Weekly Ethanol Production

Ethanol production down sharply from last week, in fact it was the lowest going back to the month of early May.

With stocks extremely tight and basis level still very strong it’s possible that some ethanol plants are going to take their down time now and see if they can wait a little bit and buy some cheaper bushels as we get closer to harvest.

From a year to date with just one week left in the marketing year ethanol production is up 6.3% from last year, USDA is estimating to be up 6.4%.

Weekly Stocks of Fuel Ethanol

Stocks of fuel ethanol increased, so that was disappointing, but we are still not at record levels.

If ethanol production does slip lower next week, it will be interesting to see if stocks slip lower as well.

The bottom line is that today’s weekly ethanol report was considered neutral to just lightly negative.

September Corn Chart

Corn prices have stabilized and ended up closing just fractionally higher versus yesterdays close.

The chart still looks somewhat negative in the very short term as we turned lower over the past few days and that was enough to turn the technical lower as well.

The intermediate term trend has turned upward, and we are sitting right at chart support where our 10-, 20-, and 40-day moving averages all converge.

If these levels do not hold that could signal pull back into the 5.87 level maybe even 5.61 as we head toward harvest.

If we get friendly news and chart support holds then 6.42 would be the overhead target.

September Soybean Chart

Soybeans very short-term trend is turned down over the past couple days with the technical indicators pointed down as well.

We were able to close a little bit higher today with the market trying to hold on where the 20- and 40-day moving averages are.

Soybeans like corn we have overall been carving out a sideways range with prices today close to the middle of that range as traders wait for fresh news.

September KC Wheat Chart

Wheat market was trying to creep its way higher over the past week or two but today the market fell hard on news that Ukraine is expecting increased exports of wheat in the weeks to come.

Talk that wheat exports out of Ukraine could increase allowed the wheat market to fall sharply but we still believe this market is in the process of developing a U-shaped bottom.

Market has been chopping above and below that type of formation and we expect wheat prices to work higher as we move through late summer and into Fall.

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