It’s been an exciting week in the grain markets as soybeans climbed upward and dragged corn along, although at a much slower pace. Looking ahead, what will happen in the markets over the next month will hinge on weather. Will Mother Nature give traders a reason to be bullish or bearish?
“We continue to see the speculator favor the soybeans over the corn,” says Brian Grete of ProFarmer in Friday's ProFarmer Profit Briefing.
Even though this a key moment in the growing season for corn, the soybeans seemed to react to the heat and potential dryness in the forecast for the end of the month, according to Grete.
“The reason the corn market has been hesitant to go is because it’s been fits and starts on the heat moving into the Midwest,” said ProFarmer’s Chip Flory. “This weekend is supposed to be perfect in the middle of the Corn Belt, but after that we see the heat moving in.”If that
If that heat sticks around and becomes extreme, it could run the market up, according to Grete. If the hot weather comes and goes, though, the impact on the market will be fleeting as well.
Flory thinks the market wants to be bullish and just needs a reason. He said it’s now up to Mother Nature to provide it.
For the soybean market, heat next month has the potential to excite the market. “August weather is the make or break month for the soybean crop,” says Grete. On the corn side of things, the recent focus has been on pollination. “We’ve rushed this crop to pollination, which is part of the recipe for getting a big yield,” Grete explained. “The other portion is to slow cook it into the finish line.” He said late season heat after pollination could start taking the top end off yield.