December corn and November soybeans tried to trade higher Tuesday but succumbed to selling pressure related to anticipation of timely rains across much of the Midwest. September Minneapolis wheat closed up 15 1/4 cents after USDA dropped the good to excellent rating on spring wheat from 37% to 27%.
July KC wheat ended down 3 1/4 cents at $5.96 1/2, staying quiet while spring wheat received most of Tuesday’s attention. September Minneapolis wheat closed up 15 1/4 cents at $7.82 3/4 after USDA dropped its good-to-excellent rating for spring wheat from 37% to 27%, still the lowest for this time of year since 1988. USDA also said 79% of subsoil moisture in North Dakota was either short or very short, the home of 47% of U.S. spring wheat production in 2020. Not only is there not much rain in the current seven-day forecast for the northwestern U.S. Plains, there is not much in the 8- to 14-day forecast either and temperatures will be hot again in the western Plains on Wednesday. Meanwhile, the winter wheat harvest picked up to 17% complete as of June 20, reaching 12% harvested in Kansas. Not much wheat will be coming from the Pacific Northwest this year as USDA’s good-to-excellent ratings fell to 15% for Washington and 11% for Oregon. When all is said and done in 2021-22, U.S. ending wheat stocks could fall below 600 mb, less than USDA’s current estimate of 770 mb. The tighter supply situation should help keep KC wheat prices supported above $5.50 a bushel. This year’s more bearish pressure on wheat prices is coming from favorable crop conditions abroad, where Russia and Europe outcompete the U.S. for exports. The western half of Russia’s spring wheat crop needs rain and bears watching. Technically, the trends remain up for September Minneapolis wheat, but are down for July contracts of KC and Chicago wheat. DTN’s National HRW Index closed at $5.85 Monday, down from this year’s high of $7.16. DTN’s National HRS Index closed at $7.34, below this year’s high of $7.82.
December corn closed down 18 cents at $5.39 Tuesday, pressured by a broad coverage of moderate to heavy rains expected in the Central and Eastern Corn Belt. The heaviest amounts are zeroed in on an area from northern Missouri and eastern Iowa to Indiana. Eastern Nebraska and southern Minnesota could get some benefit, but the Dakotas remain mostly dry. The overall pattern continues to be favorable for the southeastern Corn Belt, but dry and distressing for the northwestern Corn Belt with Iowa and southern Minnesota caught in the middle. Late Monday, USDA said 65% of the corn crop was rated good to excellent, the fourth lowest in 12 years with location making big differences in ratings. It is no surprise the lowest ratings were in the Dakotas where roughly four-fifths of subsoil moisture is short or very short. Minnesota’s 50% good-to-excellent corn-crop rating is the lowest since 2001. Nebraska holds the highest good-to-excellent crop rating among major producing states at 83%. The rain in this week’s forecast could provide a lot of timely help for drier areas and will be watched closely for actual amounts. Unfortunately for the northwestern Corn Belt, the forecast for next week is also dry. While new-crop corn prices are under pressure, old-crop demand remains bullish. On Tuesday’s close, July corn is priced over $1 above the September contract, a strong sign of commercial demand with July contracts nearing delivery at the end of this month. In central Brazil, the seven-day forecast remains chronically dry for the second corn crop, but there is rain for southern crop areas. It is odd that Brazil’s FOB corn price for July has stayed roughly sideways since late April. Technically, the trends remain up for July and December corn, but prices haven’t challenged new highs since early May. DTN’s National Corn Index closed at $6.63 Monday evening, down from this year’s high of $7.48. The national basis is 4 cents above the July contract, down from 18 cents above in early May, but still historically strong. Other commodities are mixed to higher and the September U.S. Dollar Index is trading down 0.1. The National Association of Realtors said U.S. existing home sales were down 0.9% in May, a smaller drop than expected, reported RTTNews.com.