Our market acted awfully defensive yesterday (thanks in large part to those solid crop ratings); corn was down over 20c at one point (!!). However, we started to bounce back when the noon weather reports were released and then continued the climb higher again overnight. The weather forecasts simply haven’t improved much; they are still showing hot and dry in both the 6–10- and 8–14-day forecasts. You are now hearing people talk about a “dome” setting in. In past years you may have heard this called a “Dome of Doom” by many traders. Basically, the hot/dry weather sets in and doesn’t break, which explains the “doom” portion of it. I’m not a weather guy by any means, but for better or worse, the forecasts will be the driver here for a while and they aren’t looking the greatest.
You also have the market starting to talk about that frost that hit parts of the Western belt last weekend in the Dakota’s, Minnesota, Illinois, and Iowa, in particular, its effect on soybeans. Remember, if we are going to expand our carry-outs next year, we really need to see trendline yields, so every little issue that pops up is something to watch and talk about.
Overall, for today? The bulls in the market seem very willing to stand in here and keep this market afloat, even though prices are already historically on the high side. Seems to be too much risk in this crop to completely exit stage left. On top of that, we are seeing veg oil (read: soybean oil) prices approach record high values, keeping demand for soybeans strong. We spend a lot of time talking about corn, but if you just look at soybeans, between the strong demand, the frost, the dry weather, and the somewhat slower planting in the Eastern corn belt, I have a hard time seeing the USDA (S&D out next week) print a fat carryout number on beans for next year. We will all be a lot smarter at 11 a.m. Thursday.
Corn is 3 to 5 cents higher
Soybeans are 10 to 15 cents higher