Our markets are under pressure this morning as the forecasted rains for Iowa turned into actual rains overnight with a system moving across the state as I type this, temporarily easing concerns in the #1 production state. The extended weather forecasts still show a stark difference between the NW and the SE parts of the belt, but for us here in Iowa the 8–14 day forecast is starting to appear a little more “normal” for precipitation chances. With rain flashing up on the current radar and slightly better forecasts in hand, it is pretty tough to keep the market from breaking. It’s a real pickle for the Iowa farmer too. After all, asking for needed rains AND higher prices is a tough sell sometimes.
Overall as we look forward into the U.S. S&D on corn, simply put: the demand side remains strong and the supply side is chock full of questions in both acreage and yields. One of the fears from the bulls in the market is that if/when the USDA shows a jump in planted acres in next Wednesday’s report (both corn and bean acres are expected to rise),the market will be forced to account for those acreage jumps right then and there – as the USDA doesn’t have the opportunity to adjust their yield forecasts until the July S&D report comes out. If you slap big yields on top of big acres, the market may have to stomach an inflated carryout projection for a bit until we can learn more about the crop.
So for today, look for our markets to continue to work lower on better weather forecasts. There is the weekly export sales report out this morning that could provide some direction but today feels like another “risk-off” day for the market and I expect the trade to continue to micromanage any/all-weather maps they can get their hands on.
Corn is 12 to 15 cents lower
Soybeans are 20 to 25 cents lower