Morning Comments July 29, 2021

Soybeans2

We continue to find a little bit of support today as both corn and soybeans are trading a few cents off the overnight highs. It’s been a boring, but a decent week for the grains thus far with December corn up 5 cents and November beans up 15. While we’re in this range-bound pattern waiting for the next big story (could be the August WASDE report, crop conditions, cooler/hotter forecasts, etc.) we’ll take all the support we can get. If you’re a follower of “seasonal” patterns in the grain complex, you’ll know that on average new crop futures trend lower from here on out as we get closer to Fall. As we continue to digest the size/quality of this crop, it will be interesting to see if the markets move into a “normal” pattern, or if we see a rally like we did last year. Time will tell!

Wheat markets are also providing some support to corn and beans this week. As we all know, it’s been incredibly hot and dry in the Dakotas and Southern Canada. Consequently, spring wheat prices are up over 50% since the start of April and futures reached their highest level since 2012 this month. Why is that important for corn? Well, if wheat supplies are stressed, it reduces the ability for cattle feeders to ration corn demand and switch to wheat. We witnessed that a bit this year, but today it feels like they won’t have that opportunity next year. 

Last but not least, the weather! The latest 6–10-day forecasts have turned a little cooler but also a little drier (adding to the range-bound narrative of the week). You’ll notice, there’s still no relief in sight for the Dakotas as it remains hot and dry. They could sure use a nice rain or two. I think we’d all take one for that matter!

Currently:

Corn up 2

Beans up 8-10

July 29 Map 1
July 29 Map 2
July 29 Map 3