ADDED HEAT........... Markets had no problem pricing in this
week's weather with corn up$. 40, beans and wheat $.50 Monday. We
closed last week higher on the week on lack of rain cutting
probable quality conditions. But Saturday's weather models took
the cooler weather for this week, added a heat dome for Wednesday
into Saturday and dried-up any measurable rain expected. This led
to sharply higher trade as Sunday electronic trading opened and
continuing into Monday. Corn was up limit as corn will have one
third of its crop in its key yield development time when yields
are made or lost. Weather and its effect on yields will have a
much more accelerated effect both ways now on futures. Monday's 3
PM central time weekly crop condition report put corn at 56% good
to excellent condition, versus 63 the week prior, 68 a year ago
and down for the third consecutive week. Big losers were as
expected in the Eastern grain belt with Illinois 37% good to
excellent down 15, Indiana 27% down 10, Missouri 34% down 6 and
Ohio 51% down 2. With Western grain belt states over the national
average traders will over emphasize weather in the Eastern grain
belt. Beans came in at 53% good to excellent versus 56 last week,
65 ayear ago and down for the third consecutive week. Big losers
were Illinois 35%, down 12, Indiana 24 down 8 and Missouri 26%,
down 3. WXRISK.com the AG weather site has a heat dome centered
in the Midwest Wednesday through Sunday. Very high heat with only
light rain mostly in the western grain belt. Next week looks
warm, but no high heat and .75 to 1.50 inches of rain with 70%
coverage in the Midwest. After opening higher Monday night off
the bullish crop condition report declines, traders took profits.
But new players enter Tuesday pushing us to new highs on corn and
then more profits taken before settling stronger on the close.
Traders have exhausted the weekly news of little to no rain, hot
temperatures and the condition report. You can't get any drier or
hotter, so fear is weather could turn cooler and wetter even if
only mildly and force more profit-taking especially with the
uncertainty of Friday's planted acreage report. Should forecast
remove next weeks chance of rain, grain will make new highs very
quickly. Friday at 7:30 AM central time the USDA releases its
final planted acreage numbers. This report could lead to sweeping
moves upon its release, so be cautious here. Should the report
come and go without any surprises, we will look to be long into
the weekend if weather reports suggest. My general opinion is we
will continue warmer and drier than normal. As has been the
pattern since last October to date. This will push December corn
to 6.40 and November beans 14.75. Note, I will be out of my
office next week July 2 through July 6 and no grain report.
Technicals read like this. December corn support is 5.96, 5.80
resistance 6.40. November bean support is 14.00, 13.75 resistance
14.75. September wheat support 7.30, 7.20 resistance 7.80.