** 6:30 AM CDT CBOT Prices: Nov soybeans are down 7.50 cents at $10.195, Dec corn is down 5.50 cents at $3.9925 with Sept Chi wheat up 1.00 cent at $5.065.
** AgResource AM Grain & Oilseed Comment: Good Morning! Friday’s overnight CBOT trade has been mixed as corn/soy futures sag while wheat is slightly higher. The volume of trade remains solid with over 21,000 contracts of December corn, over 24,000 contracts of November soybeans and 14,000 contracts of September Chi wheat changing hands.
The weakness in CBOT summer row crop futures is related to the “green radar blob” that passed from Central Iowa into Central Indiana overnight. .1-1.70” of rain fell across an estimated 15% of the dry Plains and W Midwest. This has sparked profit taking this AM. ARC has mentioned for most of the week how Iowa was “ground zero” for rains this week. And although the moisture will not change the trend of declining US corn and soybean yield prospects, it was welcomed and a sign to the bulls to be careful with existing profits.
However, there does not appear to be a North American weather pattern change in the making. As such, we doubt that the CBOT decline will be long lived and very deep. ARC looks for a 2-3% decline in US corn and soybean GD/EX ratings with US spring wheat holding steady at a historically low crop rating level. The Plains and W Midwest corn/soy crops have endured considerable stress this week amid the extreme heat and lack of rain. The heat/dryness has even taken off the top end of crops yields in the Delta according to producers.
The overnight IA/IL/IN rains has not ended the expanding N Plains drought or reversed the declining US corn/soy yield trend. IA producers that received more than 1.00” of rain should feel blessed, but many more are in dire need of a soaking rain with just limited totals offered in the next 7 days. Des Moines temps will range from the upper 80’s to mid 90’s for the next 10 days with just one chance of rain! Unfortunately, the stress on Iowa crops will increase
The EU/GFS weather forecast models are in good agreement for the next 6 days before departing. The EU model remains our model of choice based on its track record and recent consistency. A Ridge of high pressure will hold across the Central US for another 2-3 days before weakening and shifting southwest to a position over N Texas next week. The Ridge in this position will allow for the heat across the Plains and into the W Delta/W Midwest with highs holding in the 90’s to lower 100’s. The N and E Midwest will be cooler with highs in the 80’s to lower 90’s. No below normal temps are foreseen into early August.
The best rain chances will be along the northern and eastern fringe of the Ridge or from MN, NE IA, WI, N IL and IN/OH, areas that have been under the gun for rains this week. The rain chances end on Monday as the upper air flow shifts to one of being NW and the flow of Gulf humidity is reduced. This remains a below normal rainfall pattern for the Plains and W Midwest.
The 11-15 day forecast features a large area of below normal rainfall and near to above normal temps as the Ridge shifts a tad east and expands north.
An arid Central US weather forecast should support the CBOT into the weekend! We would not be sellers on the down marketplace this AM.
** June 1-August 4th Actual and Forecast Rainfall.
