Weather premium is the name of the game again today as new crop corn and soybeans are trading close to overnight highs (see current 6-10 day forecast maps below- HOT and DRY). Yesterday afternoon’s crop progress report provided even more support as corn G/E ratings (72%) fell 4% from last week’s numbers. Yesterday, the USDA also gave us our first look at soybean G/E ratings coming in at 67%. While we don’t have data from last week, last year at this time soybean G/E ratings were 72%, not exactly a great start to the growing season. With no break in heat or no significant moisture in sight for much of the corn belt, the bulls will feed on this data moving forward and prices may well continue to march higher. We would caution though, weather markets giveth and weather markets taketh away. It’s going to be a volatile summer!
On that note, I think it’s important to touch on nearby price action as well. Yesterday, we saw trade ranges of $0.32 and $0.65 cents in July corn and soybeans respectively. The market is simply trying to determine just how big this year’s carryout’s will be, and there’s plenty of questions we don’t know the answers to yet. Are we rationing demand? How does Brazil’s shrinking corn crop impact U.S. corn exports? What is the true number of old crop stocks on hand? Hopefully, we’ll get more definition when the USDA releases two key reports this month, the first of which (June WASDE) is coming up this Thursday at 11 a.m. Fingers crossed for some much-needed answers!
Corn: 1-6 cents higher
Soybeans: 7-10 cents higher