Markets opened higher this morning with corn up 5 and soybeans up 20 as traders add premium to the markets with hot and dry forecasts for Southern Brazil and Argentina over the next two weeks.
Soybean crops in Parana, one of Brazil’s largest-producing states, were rated lower for a third straight week due to hot, dry weather, according to figures on the state’s rural economics agency website. 57% of crops were rated good on Dec. 20, down from 71% a week earlier and 78% a year ago,13% of crops rated poor vs 6% in the previous report. 71% of Parana’s soy are flowering or at grain filling stages, during which it is more susceptible to drought losses.
The forecast for South American weather is a little different from yesterday with very wet weather in North and Eastern Brazil, 2-12 inches. Southern Brazil and Argentina have moved into a bone-dry weather pattern. The chance of a change in weather on the longer-term map has vanished this morning, showing a continuation of the doom out at least 15 days. The hot air mass looked like it might retrograde, but this morning it looks more intense. This a very bullish weather pattern. You will see the intense heat of 90’s-100’s in the bottom map for South America.
The funds are driving the prices higher based on weather and that could continue for the next few days. Once the weather forecast changes, and it will, things will drop back off to last weeks levels. I would advise producers to take advantage of this late December rally to get some old and new crop sales on the books. I would also advise putting offers in above the market with your buyers. Some of these rally’s change quickly with new forecasts being released and you don’t want to miss out.
Have a Safe Day!