The Derecho Hit the Midwest

July 29, 2020 10:20 AM
RJO grains and soybeans update

RJO grains and soybeans update

 

Midweek Grain Update

Corn

Corn was impressive bouncing off of contract lows Monday around the $3.20 level, with some follow through on Tuesday, eventually pulling back and closing unchanged. The Crop Progress report on Monday afternoon showed G/E ratings at 71% vs 72% expected and 72% last week. This is partially the reason for the bounce, but the Derecho that went through most of Iowa, Illinois, Michigan, and northern Indiana, also played a roll. The interesting part about this, the Derecho supposedly affected 10-12 million acres of corn, with corn not being able to rally more than a few cents. To me, this shows the extent of how much carry over and how large of a crop we are still expecting. The Derecho can still take a toll on overall yields, but this might not be realized until harvest time. Today there was the USDA Crop production and USDA WASDE reports at 11:00 a.m. CST.

Source: RJO Futures Pro

Soybeans

Since mid-April, Soybean futures have been stuck in this upward trend channel, and at the end of last week it had finally broken out of this to the downside from good weather and less demand at the time.  The market ran into some support at $8.65, which was an old high from back in May. The Derecho that hit parts of the Midwest wont have as much of an effect on soybeans as corn. Today’s USDA crop production and WASDE reports should give the market some short-term direction.

Source: RJO Futures Pro

If you are interested in discussing the potential opportunities in grains, contact Tony directly at tcholly@rjofutures.com.

About the Author

Tony Cholly is a senior market strategist at RJO Futures. Tony's primary focus is on technical analysis in the grain, metals, and energy markets.