July 27, 2021
Good morning,
Corn is up 4 and soybeans are up 14 this morning as traders continue to move up and down on weather models and crop deterioration which was confirmed by yesterday afternoons condition report. There is some support from rumors of Chinese interest in corn and soybeans for the December thru March timeframe.
Monday’s crop conditions fell to 64% G/E which is down 1% from the previous week with 79% of the crop silking. The Dakotas and Minnesota continue to be the poorest areas in the Midwest.
The 10-day forecast has a little bit of rain showing up in Southern Iowa and Northern Missouri this morning. The rain is projected to show up out West this Saturday the 31st. Coverage over the next 10 days looks to be less than 40% of the US growing area. Hot temps have moved into the US and will hang around until the ridge retrogrades back out West this weekend. Overall, it stays pretty hot in the West with some mid to high 90’s making their way into the Central US. As I said yesterday this forecast is one that makes crops smaller, not bigger and this heat is going to take yield out of the corn, beans and wheat. The GFS is also a little drier than the EU, and if it proves correct will smoke the Spring wheat crop to finish the season. There is no rain from the Dakota’s West and up into Canada.
Have a Safe Day
Garry Gard
920-348-6844
July 26, 2021
Good morning,
Sharply weaker markets out of the gates today with corn down 10 and soybeans down 15.
The forecast has rain forecast by the US model that will cover parts of Central Iowa and Illinois later this week. Amounts are light, but there will be several pop-up storms in the next 14 days. The back end of the models has a lot more rain in them than they did even on Friday. There are rain systems on the 31st, August 4th and August 8th. The forecast is much more active with precip than we have seen for a long while. The heat beaks later this week, but still warms up again at day 10 on the models. The Ridge looks to return out West.
Crop ratings will likely drop this afternoon with the recent heat and dryness we have seen. Talk that the crop is getting smaller not bigger may be premature, but regardless the markets are trending lower. The end of July and August are usually that quiet part of the marketing season which could explain some of the recent selloff.
This morning a Chinese Vice Foreign Minister said during talks with U.S. Deputy Secretary of State Wendy Sherman that the two countries’ relationship “is now in a stalemate and faces serious difficulties,” according to an English-language press release from China’s Ministry of Foreign Affairs. China is said to have presented the US a list of demands including wrongdoings that must stop and individual cases that China has concern with. US Secretary of State Sherman had a closed-door meeting with Chinese diplomats today. While this may just be noise in the markets, it does give traders more reasons to go short the market and until we get the true fundamentals of crop size figured out, it will be trade news.
Have a Safe Day!
Garry Gard
920-348-6844
July 23, 2021
Good Morning,
Markets are lower again this morning with corn and soybeans both down 7.
We have seen subdued trade as the traders bounce on every weather update. The GFS model continues to hold the Ridge over the Central Midwest into the first week of August while the EU model has the Ridge sliding south and west allowing for more normal conditions into the first week of August.
USDA releases updated Cattle on Feed data this afternoon. The country’s cattle inventory, which started the year out on a high note on steady consumer demand amid the pandemic, is likely going to begin to shrink as pastures in the West and Upper Midwest are rendered unfit for cattle due to drought conditions and sky-high grain prices put the squeeze on cattle producers’ profit margins.
China has been absent in the market for US new crop beans. China remains the short in the World as South American stocks already look to be close to sold out. China has almost zero coverage in new crop beans in the US and you can bet that a very large import program could start at any time. The futures prices are 4-5 dollars more than a year ago, and these purchases are not getting forward booked because of the price risk and uncertainty of the US crop. They may end up making spot purchases from harvest through January instead of the all the pre-booked grain they set for delivery last year. This will eventually set up a very bullish dynamic for new crop beans, which are forecast to have a 155 million bushel carryout for next year.
Have a Safe Day!
Garry Gard
920-348-6844
July 22, 2021
Good Morning,
Softer markets to open the day with corn down 9 and soybeans down 30.
The markets are reacting to a wetter forecast coming from the European model for the August 4-9th timeframe. The GFS model continues to hold a drier trend for the same period and the conditions leading up to this potential rain event could be detrimental to yields. The models disagree this morning for rain coming at the back end of the 11–15-day forecast. The EU forecast which is released after settlement started the markets lower from the onset of the overnight trade. The GFS doesn’t follow this solution and has little rain for the next 15 days.
The 10-day forecast by the EU is not very wet, but does have rain chances for Iowa, Minnesota, and Wisconsin. This is probably adding to the break. Extreme heat will come to the US over the next 7 days and will be the hottest temps of the Summer. We have seen this before; the market breaks just as the heat is about to show up driving weak longs out. These weather markets can be nasty, and we don’t trade up or down a nickel anymore.
USDA export sales are out, and they have the US selling 473,200 mt of wheat, 88,500 mt of old corn, 1,003,500 mt of new corn, 62,000 mt old beans, and 176,300 mt of new beans. China has almost no coverage of new crop beans but did add 526,000 mt of new corn.
Have a safe day!
Garry Gard
920-348-6844
July 19, 2021
Good morning,
Corn opened sharply higher overnight and this morning but has sold off and is now up 2 in corn and down 9 in soybeans. Weather may be the major market mover long term, but issues with China are coming to the surface and may cause concern over long term exports.
The United States and a coalition of allies on Monday accused China’s Ministry of State Security of a global cyber hacking campaign, specifically attributing a large Microsoft attack disclosed earlier this year to hackers working on Beijing’s behalf. A U.S. senior administration official told reporters ahead of the announcement. “The United States and our allies and partners are exposing further details of the PRC’s (People’s Republic of China’s) pattern of malicious cyber activities and taking further action to counter it.”
The forecast over the next week has little rain for most of the crop area in the US. Furthermore, the Western plains have almost nothing in the forecast for the next two weeks. Temps are going to rise this week in the West getting up into the 100-110’s. The Eastern US will not be as hot and peak out in the 90’s. The Ridge that is setting up is in the same area forecast on Friday and the intensity is still there today. This forecast is bullish as the Western crop is going to feel the heat. Crop rating are expected to gain for corn and beans by about a point this afternoon, but this forecast is going to turn them back lower over the next two weeks. The forecast for the East is not really all that bad, if another round of storms were to show up, where temps will be normal for summer weather.
The weather is bullish enough that we should be higher, but this business with China is currently holding the markets back.
Have a Safe Day!
Garry Gard
920-348-6844
