The heat in North America during the first 10 days of July has certainly got the market building in another weather premium. Areas that got hit with the most hit include southern regions in Western Canada and the U.S. Northern Plains. Temperatures in the 90s hit most of the corn belt and are expected to continue this week, especially in the western half of the region. Without enough moisture to compliment the heat, this is what’s helping drive corn and soybean prices this morning.
Grain markets are the red as traders look to book in some profits after the recent rally, especially in wheat. Soybeans had a solid day yesterday, with the new crop November contract creeping closer to $10 per bushel again on Chicago futures board.
As the calendar turned over to May, U.S. weather moved to the front and center of the market’s focus. The dominant feature for the month was the record or near-record rainfall in the central U.S. In the first half of the month, southern Missouri and the adjacent areas were "ground zero," and in the second half, it was the state of Indiana.
Profit taking Monday diminished the wet weather forecasts that provided support to our wheat markets for most of the trading session. All areas in the HRW and SRW regions saw 0.20 - 2.00 inches over the weekend. Eastern Oklahoma saw up to 3 inches. The extended forecast shows below normal temperatures and above normal precipitation.
As the old saying goes “Rising tides lift all boats” and we say that yesterday as the run-up in corn and wheat pulled the bean complex higher. Heavy rain and snow totals were the fuel for the rally. It is estimated that 10% of the bean crop had been planted, the question now is how many of these acres will have to be replanted. The good news for producers is there is plenty of time yet to get the crop in. We might even pick up acres if the weather doesn’t break fast as it will potentially force some corn acres into beans.
As we prepare for the month of May, it appears that the relative calm that we have enjoyed is about to end. We might even describe the last four months as ones of extreme calm. For soybeans, we had the narrowest January through April trading range since 2001; and for corn, it was the narrowest range since 2006. In fact, corn, wheat, soybeans and soy products all ended April within 1.5% of where they closed the month of March.