Weather Still Determines Short Term Direction in GrainsPosted 07/28/2017 8:37AM CT |
Soybeans: The 5-day forecast shows no rain for eastern Nebraska, Iowa, eastern Kansas, Missouri, Illinois, Indiana, and Ohio. There is a very little bit of rain for the Dakotas and southern Minnesota of less than ¼ inch of rain. The 6-10 day forecast shows below normal precipitation with normal temperatures and some above normal temperatures in the Dakotas. The lack of organized rain events in the forecast will make forecasts into mid-August released Sunday night as important to the bears as it will to the bulls. The market was supported yesterday by disappointing rain totals that fell in Iowa, although the dry southern section of Illinois and Missouri did receive beneficial precipitation. The market was also supported by a solid export sales number and a “flash” sale announcement of 264,000 tonnes of soybeans sold to unknown destinations of which 198,000 tonnes is old crop and 66,000 tonnes new crop. In 1998, the Dakotas represented 7% of the total US planted area. This year, it is over 14%. The 200-day moving average at 986 seems to be the proverbial line in the sand with a close below being a bad sign for the bull camp. Support comes in at $10.00 and $9.98 with an upside target of $10.71 longer term.
Nov ’17 Soybean Daily Chart
Corn: The markets seem to be pricing in a yield near 165-166 bushels/acre for the season but it will not take much in the way of dry and hot weather to see yields significantly lower. There is very little rain in the forecast for the Midwest for the next two weeks and conditions in the Dakotas look to worsen. We see yield near 162 for now which would leave ending stocks near 1.595 billion bushels as compared with 2.325 billion as the current forecast. If drought conditions in northern plains spread south and east, the crop could see additional filling issues. This week’s low of 379 is also the monthly low and it will be important to hold above that level into the end of the week and also for Monday which is the end of the month. The market is only down 4.25 cents on the month. Supports comes in at 384 and 382 with 398 and 402 as resistance.
Dec ’17 Corn Daily Chart