This information is provided by Archer Financial Services, Inc. 800-933-3996.
As expected the weather took center stage this week, with the market reacting to each new run of the weather models. When the dust settled, however, it turned out to be one of the smallest weekly net moves in a long time.
December corn closed the week just a mere 0.5¢ above where it settled a week ago. August soybeans closed down 5.5¢ for the week, while November soybeans closed a paltry 1.25¢ higher.
The range set this week will be an important one for these markets over the next few weeks. A break above this week’s highs will likely occur on the back of crop conditions that are in decline along with a more threatening forecast. The lows set this week will likely hold until it is apparent that the weather concerns have passed.
The market will continue to react and at times overreact to mid-day and evening weather model adjustments, but in the end it appears that the current pattern will remain for now. There is a ridge in place that at times will shift toward the center of the country and bring with it excessive heat. When it shifts back to its summer residence in the Southwest, more normal temperatures will arrive.
Rainfall amounts have been concerning and although some rain fell Friday in a narrow band across northern Iowa and northern Illinois, but overall Midwest soil moisture levels are in decline. It is important to keep an eye on hurricane development as that is a disruptive force that can break us out of this current weather pattern.
At present, it does not appear to be a pattern that is conducive to yield improvement. Currently the market is trading a yield of near 158 bushels per acre for corn. As those expectations slip toward 155 bushels per acre, look for December corn to trade back toward to its contract highs of $7.22 ¾ with $7.50 in its sights.