Grain prices are trading mostly lower to start the third week of July.
Neutral weather forecasts are keeping traders uncertain of the next direction the markets should go. As Louise Gartner from Agriculture.com puts it, the different weather models are having trouble agreeing with one another. Canola is being pressured by the Canadian Loonie hitting 79 cents USD. Here’s what else you need to know about today’s market.
Winter Wheat Crop Progress Report
Plains Grains is continuing its annual review of the U.S. winter wheat crop. They mention that Nebraska & Colorado are 3/4s finished harvest, while combined action in Kansas is nearly done. From a production standpoint, it’s worth mentioning that the average Kansas wheat yield is 47 bushels per acre off of 6.9 million acres.
The Kansas winter wheat yield number is much better than previously expected. Although the 324 million bushels of wheat the state will take off this year is still 31% lower than last year’s big crop, it’s surprising given disease and Mother Nature pressures.
We’ll know more about the winter wheat harvest in this afternoon’s crop progress report, out weekly from the USDA. Heading into the Northern Plains, both spring and winter wheat harvests are now rolling in tandem.
One South Dakota farmer told me last week, “You gotta cut it while you still can… before it turns to dust.”
We know farmers in southern Saskatchewan who will also start their Harvest 2017 campaign this week.
PGI’s analysis of the grain is showing that the crop’s quality continues to improve as you head north.
Average quality analysis shows 11.3% protein (11.2% final last year), 11.5% moisture (11%), test weight of 60 lbs even (60.7), and Falling Number at an adequate 367 seconds (392).
Money Managers Turned Bullish on Corn Prices
Managed money last week got caught a little heavy-handed in their buying, ahead of some of the more bearish weather reports. Hedge funds swung net bullish by 150,000 contracts last week in the corn market alone. The net long in Kansas City HRW wheat futures also showed to be the largest in more than a decade. That said, many of those bullish bets have seen their profits taken, considering some of the sell-down that Garrett Baldwin mentioned on Friday afternoon in Grain Markets Today.
How the Weather Affects Grain Prices Next
As we mentioned in our recap of the USDA’s WASDE report last week, the next 4 weeks will be all about the weather.
Jerry Gullke tries to two-week-up us and say that it’s all about the next 6 weeks of weather.
Focusing more short-term, this week is showing more hot temperatures across the Midwest with the dial expected to top 100 Fahrenheit in parts of South Dakota, Nebraska, and Kansas. On the flipside, the Minnesota-Iowa border areas are expected to get hit with a lot of rain (up to 5 or 6 inches).
Other lake states like Wisconsin, Illinois, Indiana, and Ohio should also get at least half an inch of rain. Things don’t look too great though if you’re not by a large body of water. Commodity Weather Group says areas around central Iowa, central Missouri, and southern Illinois seem at risk for heavy heat and little rain this week as well.
We’ll definitely be watching how much crop will be able to come out of the Northern Plains.
Last week’s U.S. Drought Monitor map shows that practically all of the western half of North Dakota is either in severe or extreme drought, with the rest of the state categorized as either abnormally dry or in moderate drought. 1/8 of Iowa is now considered to be in a drought phase.