The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
The Grain Hedge Team provides a macro-focused daily view of the world’s grain markets. Kevin McNew received a bachelor’s degree from Oklahoma State University and his master’s and Ph.D. degrees in Economics from North Carolina State University. He spent 10 years as a Professor of Economics with the University of Maryland and Montana State University focusing on commodity markets and is widely regarded for his ability to boil-down complex economic situations into easy-to-understand concepts for applied life.
In the overnight session the grains traded higher with December corn up 2 cents, November soybeans up 7 ½ cents and December Chicago wheat up 1 ½ cents this morning. The strong export sales reported yesterday coupled with dryness in both Moto Grosso and Parana are helping to support prices this morning.
The dryness in Brazil is not an immediate threat but it has slowed the pace of planting which starts mid-September and continues through November. Some areas haven’t received rain in nearly a month and are taking longer than usual to come out of the dry season. Weather forecasters are expecting some precipitation in the 6-15 day forecast but confidence in the likely distribution is low. Although the the recent dryness is unlikely to have any impact on the crop, it puts emphasis on receiving more precipitation in October.
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The most recent Seasonal Drought Outlook maps have been updated by the Climate Prediction Center and show that drought is expected to persist throughout North Dakota, South Dakota and Montana. The report also shows persisting dryness expected throughout eastern portions of the Middle Mississippi Valley, Lower Michigan, western Nebraska.
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