** 6:30 AM CDT CBOT Prices: Nov soybeans are up 9.00 cents at $9.965, Dec corn is up 5.50 cents at $3.885 with Sept Chi wheat up 5.00 cents at $5.1675.
** AgResource AM Grain & Oilseed Comment: Good Morning! The overnight CBOT trade has been mixed in another session of rather active volume. Lower prices were featured at the start of trading based on Thursday’s sharp price fall with a recovery noted once the major weather forecasting models released their updates. December corn has traded more than 28,000 contracts with over 29,000 contracts of November soybeans and 11,000 contracts of Sept Chi wheat changing hands. The markets remain volatile amid changing weather forecasts.
Thursday’s CBOT open interest data featured a 25,469 contract decline in corn, a 11,371 decline in soybeans, and a 2,946 drop in Chi wheat. The data confirms rumors that several large funds were exiting long CBOT positions.
As yesterday’s forecast reduced temperatures and lowered the risk of a Central US high pressure Ridge, today’s forecast has returned the Central US Ridge and the hot temperatures with heat warnings for many Plains and Midwest locations next week. Not only was next week’s high temps revised upwards, the heat now looks to last week into the closing days of July. The models are much warmer with yesterday’s forecast looking like an errant outlier.
The US and EU weather models are in good agreement on the return of the high pressure Ridge to the Central US to the last half of July. The mean position of the Ridge will be across the Plains and the South Central US which will largely block rainfall chances from Kansas into the southern half of the Midwest. The jet stream will ride over the top of the Ridge and produce showers/storms across; MN, NE IA, WI, and MI. Some of this rain will stray into the Dakotas, but the totals will not be enough to end the 3 month drought Heat warnings will be issued early next week with the Plains and Delta to see high temps ranging from the mid 90’s to lower 100’s while Des Moines looks to see highs in the 90’s for at least the next 10 days. Not only will daytime heat reign, but lows will stay in the 70’s and 80’s which is too warm for normal corn respiration. For the areas that did not see normal rainfall in the past few week, the heat will quickly lead to crop stress.
The models agree that the heat lingers during the 11-15 day period with limited rains for the Plains, South Central Midwest and Delta. A cooler/wetter forecast is desired by producers as corn is in its reproduction phase.
The weather forecast for the Canadian Prairies is arid with warm to hot temps for the next 2 weeks. Highs will reach the 80’s to lower 90’s. It’s been a dry 5 weeks across the Prairies and concern is rising for wheat/canola yield
July CBOT contracts will expire today with the monthly NOPA report due out on Monday. ARC looks for a June crush rate of 139-141 Mil Bu with a modest decline in member soyoil stocks.
Erratic forecast models have produced trader angst/uncertainty with Sunday’s trade likely to be volatile as a new week begins. Yesterday, the market extracted weather premium, today they will add a portion of it back.
** Weekly Rainfall as a Percent of Normal – July 7-14th.
