Corn and soybeans opened lower last night but the bulls were thrown a life raft by wheat, reacting to the weekend mutiny in Russia. Rain didn’t save everyone over the weekend but should go a long way in the central and northern corn belt, and by most accounts the overall forecast trend appears to have shifted to a more beneficial pattern going forward.
Good rains fell over the weekend in the Dakotas and the northern half of Nebraska, into the bulk of Minnesota and Iowa, stretching into northern Illinois as well. Multiple systems this week will bring rain chances to the north early on, then further south later into the week and weekend; 6–10-day maps push the heaviest rains into the southern Plains and belt while 11–15-day outlooks are wetter throughout. Temperature forecasts are a bit more varied to start out the week, cooler into the 6-10 days but warmer again heading through July.
Two factors will drive this week’s trade, these being crop reports and the USDA reports that will be released on Friday. To start trade will get the weekly crop condition report tonight and both corn and soybeans are expected to see a decline in ratings from last week. This will likely put the Good to Excellent volume on each crop under 50%. The Poor/Very Poor ratings have started to increase, and this is actually more concerning. The question of course is what these ratings mean for final yield potential. While lower ratings do indicate more stress and the likelihood of lower yields, trade has been surprised with final production numbers in recent years with poor ratings. While these numbers will be key in early week price discovery, as the week progresses trade will start to focus more on the planting revisions and quarterly stocks data. Even with plantings running at normal rates there are thoughts we may see a shift in acreage from corn to soybeans. The real driver from this data will likely be the stocks report as they will give us a better carryout indication. Trade is mixed in its opinion on these numbers, but the overall expectation is that ending stocks will remain tight on soybeans and wheat but increase for corn.
Have a great day!