Commentary
Updated forecasts with better rain chances and cooler temps had grain markets reeling on last nights open through today in my view. Crop conditions were just released after the bell. Corn’s good to excellent rating dropped 4 points to 68 percent from 72 percent last week. Number one producer Iowa fell 14 points to 63 percent. Minnesota dropped 11 points. The Dakotas were unchanged on the week with ND at 42 percent, and SD at 45 percent. Those 4 states represent the NW quadrant of the corn and bean belt and have been a source of worry as parts of those areas have endured historic drought the last 12 to 18 months. However many of these areas saw an inch or rain this past weekend for some needed relief. The forecast moving forward and perhaps allows for a shift change. The 6 to 10 day forecast calls for cooler temps and better rainfall chances with wider coverage for the areas of need along with the Great Lakes starting this upcoming weekend.
Beans came in at just 62 percent good to excellent, down 5 points on the week which is a likely result in my view of the hot and dry stretch in the Midwest the last three weeks. Again the Northwest quadrant remains the trouble spot for soybeans with difference vs Corn being Illinois being downgraded on the good to excellent rating by ten points from 73 to 63. Iowa’s bean rating dropped 12 points, Minnesota lost 9, while the Dakota s were left unchanged at 45 percent and 24 percent for South and North Dakota respectively.
These ratings are very subjective, meaning they can flip flop by double digits back and forth after one good rain. Plus its early in development time, we are nowhere close to key yield development time for corn (Silking) or pod development for beans in late July or early August. But what we saw last night through today may become more of the norm rather than the exception moving forward as it to relates to any reversals of forecasts from a Friday afternoon weather outlook to something revised by Sunday evening. The high prices of corn and beans could mean extreme volatility moving forward. However aside from the weather outlooks in the 6 to 10 day forecast, we are one day closer to the planted acreage number on June 30th. Until that is released trend and index following funds won’t have a realistic look at the balance sheets for corn and beans in my opinion. Once we get past the moth end report, we move into the important part of the growing season. Its my belief that the funds will trade every weather forecast until we get tio the 30th
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