** 6:30 AM CDT CBOT Prices: Nov soybeans are up 5.0 cents at $10.0675, Dec corn is up 6.0 cents at $3.965 with Sept Chi wheat up 2.00 cents at $5.0525.
** AgResource AM Grain & Oilseed Comment: Good Morning! After a mixed to lower start, CBOT futures have recovered with corn, soy and wheat posting moderate gains this AM. The volume of overnight trade has been below those of recent nights as just over 25,000 contracts of Dec corn, just over 20,000 contracts of Nov soybeans, and 10,000 contracts of Sept Chi wheat have changed hands.
Traders are grumbling about the US GFS poor performance of the US weather model and its often large disparity with its more correct European counterpart. The GFS went cooler/wetter in its midday solution yesterday, only to be countered by the release (after CBOT close) of the European model solution that held onto a generally warm/dry forecast for much of the Midwest, Plains and Delta. In markets that are trying to add or subtract weather premium via crop yield and supply, the errant GFS model is not helping the process. ARC would advise clients to use the GFS model with great caution until its track record improves.
The AM major forecast models are warmer for the Central US into August with any meaningful rain to drop across the Northern Midwest.
A Ridge of high pressure will hold across the South Central US into Saturday which will serve to raise temperatures to the 90’s to lower 100’s across the Plains, Delta and the southern 2/3’s of the Midwest. Even areas like Des Moines IA will reach into the lower 100’s by Friday. The only crop areas to escape the heat will be the northern states of; MN, WI and MI.
Rainfall chances will occur on the northern and northeast fringe of the Ridge or the Lake States of; MN, WI, MI and OH. Rain potential here is estimated in a range of .5-2.50”. Unfortunately, the EU model does not have these rains moving south into IA which will key for US crop condition ratings and yield prospects next week. The best chance for rains across the Lake States is over the next 48 hours. Only a few isolated showers occur across the rest of the ag belt.
The Central US high pressure Ridge relaxes late Saturday/Sunday and shifts back westward to the Intermountain west. The heat relinquishes for a few days early next week before rebuilding across the Plains and the SW Midwest. This remains a warmer than normal Central US weather pattern with below normal rains for the Plains, W Midwest and W Delta. ARC does not see this pattern changing as the calendar shifts from July into August.
ARC notes that this is not a straight hot/dry Central US weather pattern. There will be showers from time to time and temps will not always be extreme. It is not your atypical kind of Central US drought pattern.
Other news is limited overnight. The CBOT’s price focus will remain squarely on Central US weather and crop yield potential. US corn/soy yield potential is eroding and a test of the recent highs is expected. Whether those highs are exceeded will depend on first half of August Central US weather conditions.
** July 1-August 1st Rainfall as Percent of Normal (forecast included):
