Category: Ag Markets Update

FOR THURSDAY: (7/28) The 6-to 10-day outlook (Aug. 1-5) favors about an 80% chance for above-normal temperatures near the Great Lakes then and 70% chance for the remainder of the Midwest. That forecast has normal to above-normal chances for rain then. Besides weather, beans were also boosted a bit by China. We’re at odds between bullish weather and end of the month profit-taking potentially lifting this market and incomplete patterns. Will have to see how it looks in the morning. Hogs and cattle look like they will come off into the end of the month.

FOR WEDNESDAY (7/27) Winter wheat finished down 11 to 14 cents to pull corn down about 2 cents. A big U.S. harvest and talk this week that Russia may have its biggest wheat crop in more than 20 years weighed on wheat. Eyes are on North Dakota, where storms this week could be harmful to the mature spring wheat.

Still, patterns suggested a 3-wave pullback should be bought and we would rather be long wheat. Beans project 990 or 999 before the next sale will come in, and we probably won’t get a decent risk/reward to be selling corn but will keep orders in.

FOR TUESDAY (7/26) Weekly progress reports were bearish for corn and beans and we have noted that cycles are bearish this week. We are stuck with very oversold conditions and no risk/reward for selling unless prices can go higher. The wet conditions added to a bearish mood that developed following last week’s 30-day outlook that lacked crop-damaging heat.

Corn finished about unchanged as that market has stabilized after falling earlier this summer as it became apparent the crop would move through pollination unharmed. Hogs have turned the corner on the week so you can buy dips and cattle will be hard to play after going limit up.

FOR MONDAY (7/25) Profit-taking finally set in at the close for grains but not after major capitulation. Key support for corn held at 333 and beans went through our lowest target of 976. The latest 6- to 10-day (July 26-30) outlook also lacks extreme heat for the western Midwest and has above-average chances for rain. Data that accompanied this week’s U.S. Drought Monitor said 2% of Iowa’s corn was in a drought area, 4% of Nebraska’s and 31% of Ohio’s. At the moment it seems that the Eastern corn belt will have more problems but then so much more is grown in the West. Cattle on Feed report was better than expected and cycles point higher into Wednesday. Same is true for cold storage and a bounce into Wednesday is likely.

FOR FRIDAY (7/22) Thursdays are often lower for grains and even with hot temperatures, the market did not disappoint. This week will be hot with highs of 100 degrees or more in Nebraska and western Iowa and mid-90s elsewhere in the Midwest. But the heat is expected to ease after this weekend with highs dropping into the 80s early next week. In addition, the latest 6- to 10-day (July 25-29) outlook indicates normal seasonal temperatures then. However, it also expects dry weather.

Data that accompanied the U.S. Drought Monitor released on Thursday said 2% of Iowa’s corn was in a drought area, 4% of Nebraska’s and 31% of Ohio’s. Cattle are waiting on the Cattle on Feed report. Time to cover August hog hedges and August live cattle hedges as lower support targets hitting.

FOR THURSDAY (7/21) We failed to get a grain bounce and we have been patient with July but the failure is really bad news with very oversold conditions. Forecasts showing less intense heat next week sent corn and soybeans lower on Wednesday, with corn setting contract lows in all months and soybeans tumbling near midday after trading higher in the morning. Funds were net sellers in the three crop markets for the second straight day. This week will be hot with highs of 100 degrees or more in Nebraska and western Iowa and mid-90s elsewhere in the Midwest. But the latest forecasts have highs dropping into the 80s on Monday, which should lessen the stress on crops. In addition, the latest 6- to 10-day (July 25-29) outlook indicates normal seasonal temperatures then. However, it also expects dry weather.

FOR WEDNESDAY: (7/20) We warned you how these bullish forecasts can quickly change. The NWS’s latest weekly and 6- to 10-day (July 24-28) outlooks indicate this week’s hot weather of 90 and 100-degree highs will be brief, likely lasting through Friday, with next week’s highs expected in the 80s.

Also, rain last week and through the weekend put crops in good position to weather this week’s heat. Patterns suggest very oversold conditions for Dec wheat at 438 and Nov. beans at 1021 and Dec. corn to max. 342 so that some short-covering may develop and maybe the reality of the heat in Chicago will get those traders short-covering. Meats are moving toward congestion ahead of monthly reports.

FOR TUESDAY: (7/19) I suspect that markets are oversold enough that we’ll get a bounce if we can get in from lower levels at pattern completions. Corn, soybean and wheat closed higher on Monday as traders await the severity and duration of this week’s Midwest heat wave.

For the Midwest, forecasts put 100-degree highs from the Mississippi River and west and 90-plus east of there. The 6- to 10-day outlook (July 23-27) has above-normal temperatures in the Midwest and Plains then, plus dry conditions for the western Midwest. Reports from the field say Midwest corn made it through pollination in good shape and widespread weekend rain should help the crops make it through this week’s hot weather. Winter wheat moved higher with corn and soybeans despite harvesters reporting good yields as the winter wheat harvest moves into Nebraska and South Dakota. Protein content has slipped with readings of about 10% common versus the normal 12%.

FOR MONDAY: (7/18) Rains last week focused south of I-80. That’s expected to change into early next week, according to maps for the next seven days, as milder temperatures begin to give way to heat from the Southwest. Official 6- to 10 and 8- to 14-day forecasts out yesterday show the warmer and drier pattern extending into the last week of the month, though the latest updates this morning dial back the extreme conditions some. Lately the more bearish forecasts tend to manifest over the weekend and cycles suggest as much going into Monday.

Still, we’re open one more recovery but at the moment we think the market will be lower the next few sessions. Gaps on Sunday night are very difficult to trade.

FOR FRIDAY: (7/15) We warned you how fickle these forecasts are how they can quickly turn. Soybeans made a sharp turn lower at midday and closed sharply lower as new forecasts apparently favor rain next week for the Midwest crop and indicated the heat wave then may not last long.

Previous hot, dry forecasts for the Midwest helped drive corn and soybeans higher this week with some help from Tuesday’s USDA report that increased exports for corn and soybeans and lowered Brazil’s corn crop.