Weekend weather was within Friday’s expectations in most areas. More than 40% of US corn production was affected by 100+ degree temperatures on Friday. Although a cool front is occurring now, intense heat may return to the Plains and W. Corn Belt on Thursday.
Rains across portions of the Delta have been increased slightly through the 5 day period. Amounts of .75″ – 1.50″ are expected with amounts over 2.00″ locally. The Corn Belt stays mostly dry during this time period. Below average rainfall will persist for the majority of the Corn Belt during the 6-10 day period.
6-10 Day Precip Forecast
1-3 Day Precip Forecast
In our opinion, the outlook for the corn market remains bullish. Damage done in the Eastern Corn Belt is irreversible in our opinion. Recent heat is now beginning to stress crops in the West as well. Expect another significant drop in crop ratings on Monday afternoon. We fully expect the December corn contract to trade above $7 again this week. A 150bpa national yield is optimistic given recent weather patterns.
The soybean crop still has a chance to catch rains that could “save” the crop from poor yields. In addition, we look for enormous acreage to be planted this fall in South America. SAM producers had a short crop last year, and now have high prices and currency action in their favor. Just as US producers planted over 96 million acres of corn this year after 2011′s short crop, we look for a sharp increase in Brazil/Argentina soybean acreage.
We expect wheat prices to follow corn prices on any significant move higher, as funds continue to cover short positions. We see major fundamental reason for wheat to rally further, other than corn prices.