Commentary
This past weekend’s forecast and early week forecast models show a hotter drier pattern into August. Since August is key yield development time, it’s like one person screaming fire in the theater and the shorts go running for cover. I think we saw some of that market action on Monday because last Fridays close looked very bearish. Funds came in record short this week. Today’s forecast supports this theme but still offers decent rain chances in through mid-next week in the Midwest although a bias toward above normal temperatures and below normal precipitation, especially in northern and western portions of the belt into early August. However, while it warms up above seasonal norms, no heat domes that park themselves over the Midwest for an extended period are forecasted. It’s my opinion that we’ll may see soybean yield models creep lower if this forecast verifies hot and dry for an extended period as we move deeper into August. Will it be enough though for the USDA to alter its balance sheet with significantly lower yield and production? In my view not a by a long shot. For that to happen it needs to stop raining through August to get a significant jump in prices into Labor Day. With outside markets and black swans circling everywhere for potential escalations in global conflicts and the ongoing circus of the Presidential election, everything could be up in the air moving forward. Outside of that grains during US planting season are a supply side driven market with weather 90 percent of our pricing influence. Condition ratings for beans up to this point have been phenomenal at 68 percent good to excellent. Technical levels come in as follows for the remainder of week. Resistance is at 10.78/84. A close over and its 11.03. Over 11.03 and its 11.31. Support is at 10.64. A close below and its 10.38 and 10.34. Under 10.34, its katy bar the door to 9.72.
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