** 6:30 AM CDT CBOT Prices: Nov soybeans are up 5.50 cents at $9.7875, Dec corn is unchanged at $3.8625 while Sept Chi wheat is down 1.00 cent at $4.585.
** AgResource AM Grain & Oilseed Comment: Good Morning! Mixed has been the overnight CBOT trade with soybeans catching a bid this AM as traders ponder how NASS will account for small soybean plant size in its yield calculation? Corn/wheat prices have held around unchanged in non-inspiring volume.
The always important USDA August Crop Report will be out this AM at 11:00 CDT and leftover positioning for the report will continue this AM. As ARC research indicated yesterday, the USDA August report historically produces an average 2% price move in corn/soybeans which this year would amount to 8-10 cents in corn and 15-20 cents in soybeans.
A bearish yield estimate in corn would be a yield above 168 BPA and 48 BPA in soybeans, while a bullish yield estimate would be below 164 BPA in corn and below 47 BPA in soybeans. It’s the corn yield that will garner the most market attention since it’s a more accurate yield assessment, historically speaking.
AgResource estimates the 2017 US corn yield at 166 BPA with soybeans at 47 BPA. Our market research would lean to a neutral corn and positive soybean market response. In wheat, its all about world production and whether the production gains in Russia will offset declines in the rest of the world.
Another frontal pass produced less than expected rain across IA/IL overnight. A few spits of moisture dotted IA in the past 24 hours, but for the most part, the system was a bust. A few lite showers are noted this AM across WI and N IL, but the drier areas of Central IL will not see any moisture. If you received any rain overnight, you should be feeling lucky.
The forecast offers another 7-8 days of mostly dry weather for the heart of the Midwest that includes; IA, IL, IN, and OH with temps that are slowly rising. By the end of next week, Central US temperatures will be returning to near to above normal levels with highs ranging from the 80’s to lower 90’s. Until then, high temps will hold in mid 70’s to the mid 80’s with lows in the 50’s and lower 60’s.
Heavy rains will be focused in a southeast arc from Colorado into S Carolina where a front will be stalled. Rainfall accumulations will range from 1-4.00” with some low level flooding likely. This front will act to steal upper air humidity from the Midwest. Oklahoma looks to be the location of the heaviest rain with accumulations exceeding 5.00”.
The 9-15 day period hints at the return of improved rain chances, but locations/amounts are difficult to determine. A warm front should have a better chance of producing rain, but it does not appear to be the case where everyone will get the rain that they desire. And unfortunately for crops, the deeper into late August, the more diminished the yield impact.
The 7-15 day forecast for the Indian monsoon offers some strengthening while dryness prevails across the Canadian Prairies and SE Europe/Ukraine.
Other news overnight is limited and the market fireworks will be provided by USDA later this AM. ARC would remind clients that WASDE will raise US 2016/17 soybean/corn exports which could enhance any US 2017 yield decline.
Good luck with the Report!
