August 3, 2021
Good morning,
Weaker markets overnight with corn down 5 and soybeans down 25 following last nights crop ratings surprise. Weakness in the soybean markets pulled corn and wheat lower overnight.
Traders were looking for a drop in national crop ratings yesterday afternoon in corn and soybeans but didn’t get the drop in soybeans. While corn came in 2% lower at 62% G/E, Soybeans increased 2% to 60% G/E. The Dakotas and MN remain the only states that are dramatically low in crop ratings as they have been all season. Higher ratings in in the eastern states is going to make it difficult to run this market higher unless yields come in much lower than expected.
Forecasts bring back some northern corn belt rains this coming weekend and into the 6–10-day time frame. These rains will give the soybeans and corn a better chance to salvage decent yields especially in the Dakotas and Minnesota acres.
Have a Safe Day!
Garry Gard
920-348-6844
August 2, 2021
Good morning,
Corn is up 4 and soybeans are down 4 to start the day.
Last Friday’s selloff was mainly attributed to profit taking at week and month end for traders. July came to an end as old and new crop futures both lost ground during the month. September futures were down 52 cents and December futures were down 43 cents for the month. Just enough rain and favorable weather forecasts continued to drag the markets lower.
Harvest has begun in the deep south and will work its way north in the coming weeks. Locally producers are reporting crops that are 1-2 weeks ahead of normal which should result in some late September or early October harvest. This will continue to pressure the local cash prices as end users widen basis moving forward.
There continues to be rain in the forecast for the 7–10-day models moving forward. This should keep the markets in check if realized. Crop conditions are expected to come in unchanged to a couple percent lower in this afternoon’s report.
Have a Safe Day!
Garry Gard
920-348-6844
July 30, 2021
Good morning,
Markets are taking a risk off approach today with corn down 10 and soybeans down 24.
Some rains have fallen in South Dakota this morning and the totals are .2-.9 inches. The forecast looks a little bit wetter overall from yesterday on the 10 day outlook by the EU. The GFS is not as wet as the EU and doesn’t have the placement of rain in Iowa. Other than Missouri, there isn’t a significant rain event in the forecast that would drive the markets to sharply lower prices today. The longer range forecast has the Ridge returning out West in the 9-15 day period. More 100 degree temps are expected to come in August. This will not be good for soybeans if proven true and there are not enough active storm systems to keep ratings from slipping.
I don’t think todays selloff has much to due with trains and more to do with the fact we are at week and month end. Monday’s have been a mess for the last two weeks and we have seen all kinds of spreading between different contracts. This sloppy trade has moved most of the “trend is your friend” traders to the sidelines as they are getting worn out by false signals. All in all we have traded back to the middle of the range and are keeping a high price. Until there is some consistency or actual weather models confirmed this market will act like an elevator on any news. Based on projections and how good things are looking in the east I would say our upside heading into harvest is limited. Demand for old crop is almost gone as we are now seeing harvest in the south. Most end users are covered or have very little left to buy to get them to new crop. There are several ethanol plants across the country that have idled production or are running at reduced rates due to poor margins. Producers sitting on old crop are walking a fine line on when to sell. Basis levels are still pretty firm, but I would expect them to break hard in the coming weeks.
Have a Safe Weekend!
Garry Gard
920-348-6844
July 28, 2021
Good morning,
Markets are quiet this morning with corn up 1 and soybeans down 2. Traders continue to try to access the poor conditions in the Northern plains and western belt and how much it will lower national yields for corn and soybeans.
The latest 6-10- and 8-14-day forecasts have milder temperatures for most of the Midwest but below normal precipitation. For the Northern plains. This years crop conditions are 64% G/E compared to 72% G/E last year. While no two years are the same and there are many variables, its worth noting that last year’s national yield was 172 bpa in corn and the USDA is projecting 179.5 this year. I’m not saying that we can’t hit the 179.5 or even higher, but we need several areas to come in above average to make up for the lost production in the west.
I don’t believe it will be at the 2021 pace, but the US will continue to export corn to China in 2022 as they continue to build inventory. The poor South American crop this year will result in additional sales from the US but probably won’t hit the balance sheet until Spring/Summer of 2022. The USDA reduced its projection for 2022 exports by 350 million compared to 2021 in the most recent S&D report. This reduction resulted in a 1.432 billion bu carryout. This is still a huge carryout number, but as we have seen this year, traders run the market higher the closer we get to 1.0 billion.
Producers that still need to make sales for fall delivery should get them made soon. The markets will trade lower long before the weather changes, so you have to be proactive. $5.25 out of the field, more than pays the bills and allows you to keep doing what you love. Waiting for more only cost you in the long run.
Have a Safe Day!
Garry Gard
920-348-6844
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
