Corn is trading higher for the third consecutive day with the December contract breaking above the 20-day moving average as crop conditions slipped last week and the forecast shows dry and hot weather over the next week.
In the central US and Plains, temperatures are expected to reach as high as 113 degrees according to the GFS model while the EU model sees more moderate temperatures between 90 and 100 degrees. The Dakotas have been very hot as well, and silking has only advanced to 23% from 10% last week.
One crop scout has increased his estimate for the average US corn yield by 1.5 bpa to 181.5 bpa which would be a record. While this is possible, NASS will likely reduce the number of planted corn acres due to the flooding earlier in the season, which could offset the gain in yield.
Soybeans are trading slightly higher at midday which would make for the third consecutively higher day, but yesterday, prices met resistance at the 20-day moving average and retreated down from highs earlier in the day. Soybean meal is trading higher today while soybean oil is lower.
Soybean oil has been pressured this week by a sharp break in crude oil as well as palm oil which is trading lower today. Despite this, crush margins remain profitable and have driven domestic demand.
While US soybean exports have been slow this year with Brazil taking the majority of business and capturing 87% of China’s soybean imports, US soybeans are becoming more competitive, and there are expectations that China will step up to buy more US soybeans.
All three wheat classes are trading higher today and have picked up steam from earlier in the day when futures were trading lower. Chicago wheat is leading the way higher today while spring wheat has been the leader previously this week as the winter wheat crop is nearly harvested.
Wheat production in western Australia is set to improve by up to 12.3% this season following recent rains, and production is estimated at 10.5 mmt. The favorable conditions will also benefit the barley and canola crops.
Hot and dry conditions in the US northern plains as well as the Canadian prairies may begin to cause concern for spring wheat yields and could keep Minneapolis futures supported.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
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