Today’s Prices

Grain prices finished mixed for the second day in a row with corn and beans higher while wheat headed sharply lower.

Grain Market News

High Temperatures

High temperatures yesterday shows that the 100s have been pushed down and basically just now located in Texas.

There is 100s in the pacific northwest as well but when it comes to our grain belt the 100s have been pushed out of the plains entirely except for Texas.

This leaves most of the U.S. corn and bean belt with temperatures in the low to mid 80s which is quite favorable for this time of year if we have adequate moisture.

7-Day Observed Precipitation

This forecast shows some significant rain from the Nebraska/South Dakota border, through southwest Iowa, Missouri, and into Arkansas.

There have also been a couple other smaller areas in eastern Minnesota and portions of Michigan.

We also had areas that have missed out on rain over the past week like South Dakota, Kansas, Oklahoma, much of Texas, even much of Illinois and Kentucky.

Now in the eastern belt missing out on rain is probably not a big deal but in portions of South Dakota, southwest Minnesota, into central Nebraska, Kansas, and more those are areas that could use a final rain and crop stress is likely on going.

The important piece to note when looking at the rainfall map is that the rains that fell earlier this week fell in an area that desperately needed them, so it did shrink the dry areas of the U.S. corn and bean belt.

30-Day Precipitation- % of Normal

Over the past 30 days even including the rain that have fallen in the last couple weeks we are still seeing significant deficits in the Dakotas, Iowa, Nebraska, portions of Illinois, and then the southern plains with Texas, Oklahoma, and Kansas.

Within that area we do see some areas in southwest Minnesota, southeast South Dakota, and the areas in green and blue are areas where crops are doing quite well.

Much of the Ohio valley into southern Illinois and into the delta has done quite well over the past couple of months.

Drought Monitor Class Change

Over the past 4 weeks we have generally seen improvement in the eastern belt, Ohio valley, and northern delta.

Most of the plains and the western belt has seen declines but there are a few isolated areas in Minnesota and parts of west central Iowa that have seen some improvements.

Not all areas have seen through breaking rains and therefore we still have crop stress taking place in many areas.

Drought Monitor

 We still have a lot of dryness in the plain states into the western belt.

Looking at this drought monitor we see some of these drought conditions that are still in place in portions of the U.S. corn and bean belt.

It’s nowhere near the drought monitor that we saw in 2012.

2012 Drought Monitor

You can see tremendous drought over a large portion of the US corn and bean belt in 2012 including the heart of the belt.

Even though we have extremely dry areas, this year is not even close to the drought conditions that we experienced in 2012.

7-Day Precipitation Forecast

The forecast shows some scattered rain from half inch to 3 quarters in much of the northern belt into the lake states.

Virtually no rain in the central and northern plains but as I mentioned heavy rain is expected across the deep south in Texas, Oklahoma, Arkansas, and Louisiana.

Grain Market News

Brazilian Monthly Corn Exports

In June instead of shipping virtually nothing they shipped over a million tons, in July last year they shipped 2 million metric tons this year over 4, in august last year they shipped 4.2 million metric tons this year 8mmt projected.

Brazilian Corn Future’s

We can see that after their record Safrinha crop Brazil was selling corn $1.25 cheaper than the US.

But their prices due to their extremely heavy sales and strong shipping, their basis level has rallied dramatically, and right now Brazilian corn is almost a $1 above US corn.

This will promote very strong U.S. export once our supplies become available.

Our exports are not going to increase immediately since our stocks are relatively tight but once harvest begins, they will.

Ethanol Swaps

Ethanol as of today is trading about at 2.50 per gallon in the swaps market and that compares to gasoline trading at $3 today.

Therefore, ethanol is 50 cents per gallon cheaper than gasoline and that should also allow for strong demand from the blenders and should help keep ethanol demand strong.

September Corn Chart

Corn prices did trade lower this morning down to 6.04 per bushel but they turned around and closed at 6.15.

Corn continues to find support where the 10-, 20-, and 40-day moving averages are all converging.

If that level can continue to hold that’s good news and the market may want to test the recent highs.

From a chart perspective if that level does not hold then the market may be interested in testing the recent lows.

September Soybean Chart

Soybean prices also consolidating close to where the 10-, 20-, and 40-day moving averages are converging.

The recent range on soybeans is last Fridays high at 14.64, the lows the previous week at 13.66, and today we closed at 14.05.

The technical indicators have not been able to get over bought or oversold recently.

September KC Wheat Chart

Wheat looks very disappointing, in fact earlier today we were discussing the issues in the wheat market.

Wheat did get hit sharply for the second day in a row with todays low at 8.07 which makes a new low for the move.

We are now the cheapest price in wheat going back to early February, this is quite interesting in even though the Russian/Ukraine war is still going on after 6 months, prices are below where they were at when the invasion happened in February.

We believe that wheat prices are now undervalued, we just need to wait for some friendly news to spark the next rally.

Questions or Comments