Grains sold off today after the long weekend brought more rain than was expected for much of the Midwest. December corn ended up finishing 11 cents lower at $6.74 ½, November beans 16 ¼ lower at $13.72, and December wheat 2 cents lower at $7.29.
The 10 day outlook has turned more favorable for parts of the Midwest and has caused some of the weather premium to be worked out of the market. With crop conditions coming in today at 3pm, the market found some support on the chance these would come in below expectations. Crop conditions ended up coming in lower for corn and beans and are as follows:
Corn silking: 65% 69% is the 5-year average
Corn doughing: 9% 12% is the 5-year average
Corn good-excellent condition: down 4% from last week at 62%
Soybeans blooming: 60% 68% is the 5-year average
Soybeans setting pods: 16% 27% is the 5-year average
Soybean good-excellent condition: down 2% from last week at 62%
Winter wheat harvested 75% compared to 80% on average
Spring wheat headed: 83%
Spring wheat crop condition: up 1% from last week at 74%
*This was a slightly bullish report and we may see the market try to buy corn and beans on the overnight trade.
Outside markets seem to be most heavily affected by the debt ceiling negotiations currently going on. Obviously the market is going to be tense when we are coming down to the wire like this. Any heavy selloffs in the equities could trigger weakness in the grains and is something to keep in mind.
Now that we have had extra moisture added over the weekend, and the near term forecast is much better than before, we may have turned the corner on this weather market. Obviously there are still some chances for problems during the month of August, but it looks like we are getting through a major risk period for grains. We think the market still has considerable downside risk from here and we should remain adequately hedged. If you want extra protection on bushels expected over and on top of your guaranteed production, please call your broker to go over some put strategies.