Markets are slightly higher this morning with corn up 5 and soybeans up 20.
Yesterdays early gains faded as we closed the day due to changes in the weather pattern and positioning heading into Friday’s report.
The largest change in the weather is the ridge has moved out of the West and sets up Northwest into Canada. As this ridge leaves the chances of rain increase around the Midwest. Where it’s been dry out West showers are forecast into next week. Rain is also forecast from Iowa North into Minnesota and Canada. This is a completely different pattern that would have been pretty bearish two weeks ago. Some areas are still going to miss like Illinois and Missouri.
Tomorrows WASDE report will keep things in check today as traders position ahead of the unknown the USDA will give us. Expectations are for lower yields in corn and soybeans due to drought in the west, but could be limited by a favorable eastern crop. What will the USDA do, we have not idea as its almost never what anyone expects. Any carryout below 1.3 million bushel is going to run the corn market higher as that could put the stocks/use ratio close to 9%.
Producers hanging on to old crop should be exiting that position quickly as basis levels continue to deteriorate. The CBOT appears to be range bound but any upside in the board is going to result in basis levels widening even further.
Have a safe Day!