Morning Comments July 1, 2021

Josh Carlson 043021

Well, the USDA report is now behind us and the general theme is: not enough. Not enough corn acres, not enough bean acres, it’s going to be tight all around and prices are reflecting that as our corn market was up 40c yesterday (the limit) and soybean futures were 90c higher. As for the report, the market was expecting 93.8m acres of corn and we only got 92.69m; the market was expecting 89.0m acres of soybeans and we only got 87.55. Not going to cut it. There are maps below from USDA which show you the changes by state from last year, and changes from the March planting intentions. 

With planted acres now a “fixed” number for the balance of the summer, the yield portion of the equation becomes even MORE important, which of course means so does the weather forecast. Exhibit A: the long weekend ahead of us feels extra spicy because the weather forecasts (now starting to cover some of the early pollination window) can change a lot in three days and the market is fully aware of that risk. Staying with weather, I hate to overload you with maps but you will also see below that the fresh longer-term 30-day forecasts aren’t showing any major/favorable shifts for the already dry areas of the NW Belt (the latest drought monitor is also below, and that’s the last map this morning, I promise).

So overall for today, we look to kick things off sharply higher as the market tries to sort through the proper “risk premium” to place under this market. Yesterday’s price rally appears to have been: not enough.

Currently

Corn is 20 to 25 cents higher

Soybeans are 20 to 30 cents higher

July 1 Map 1 July 1 Map 2 July 1 Map 3 July 1 Map 4 July 1 Map 5 July 1 Map 6 July 1 Map 7