** 6:30 AM CDT CBOT Prices: November soybeans are down 5.0 cents at $9.89, Dec corn is down 6.0 cents at $3.975 with Sept Chi wheat down 16.0 cents at $5.44.
** AgResource AM Grain & Oilseed Comment: Good Morning! A brief opening rally in soybeans was followed by profit taking as CBOT futures retreated overnight. The corrective trade was overdue with US corn crop conditions actually rising 1% to 68% GD/EX thru last Sunday.
The weekly NASS Crop Condition/Progress report was delayed by 2 days via the July 4th holiday. Traders viewed the rise in corn crop conditions as signaling that the recent warm/dry weather has not yet harmed US corn yield potential.
This morning’s weather forecast is little changed from Wednesday with additional heat/dryness to be focused on the Plains/W Midwest in a general NW upper air flow. US soil moisture levels will continue to decline with an estimated 39.7 Mil acres of US farmland rated short or very short of soil moisture thru last Sunday. This is the largest area of early July dryness since the dire drought of 2012
The concentration of very short soil moisture is through the N Plains where Dakota farmers seeded a combined 21.5 Mil acres of corn/soybeans. North Dakota planted a record large 7.2 Mil acres and South Dakota 5.4 Mil acres of beans. Including Nebraska/Kansas (core area for July heat/dryness), farmers seeded 24 Mil acres of corn & 23 Mil acres of soybeans, or 26.5% of all US production!
A 20% yield decline across the Dakotas would amount to the loss of 275 Mil Bu of corn and 121 Mil Bu of US soybeans. Should the summer row crops in Nebraska and Kansas be included, the US production losses would grow even more. This reflects the importance of gauging whether the dire drought in the Dakotas spreads south and east during the last half of summer?
NASS reported that US soybean GD/EX ratings fell 2% to 64% with spring wheat ratings down 3% to just 37% GD/EX. US winter wheat crop ratings fell 1% to 48% GD/EX with harvest reaching 53%. Some 59% of the US spring wheat crop has already headed, with rain making little difference to yields beyond mid July. The time that rain could really help the US HRS crop has now passed.
ARC notes that US corn/soy ratings are the lowest since 2012 which is why Mother Nature is key to CBOT values going forward.
The US & EU weather models are in fair to good agreement with a broad and amplified Ridge of high pressure to hold across the Intermountain West with Trough of low pressure across E Canada setting up a NW upper air flow through the Central US. The warmest/driest areas will be across the Plains and W Midwest while the widely scattered showers are possible across the E Midwest and SE US. This is not a wet Midwest pattern and below normal rainfall is expected. However, any extreme heat will be relegated to the Plains and W Midwest. The Central US weather forecast is worrisome and there is no evidence of a pattern change in the forecast models for the next 10-14 days.
This is not a gap-and-go kind of bull market with a strong high pressure Ridge holding across the Central US. However, US and world grain production are in retreat & with China short bought on forward soy import needs, ARC doubts that any correction will dip too far until soaking Midwest rains return. Don’t sell this break.
