Good/excellent ratings released in this week's USDA crop reports for corn and soybeans in the major producing states of the Midwest were mostly unchanged over western areas, but down a little in parts of the eastern Midwest due to dryness.
Topsoil moisture conditions in the western Midwest and Northern Plains compared to a year ago are much better. Soil moisture conditions are similar to a year ago in Illinois, but drier than a year ago in Indiana and Ohio. We have seen some beneficial rain in the east during the past few days that will improve conditions.
Normally this blog is written on Tuesday, but I am happy that it is being written a day later this week. The reason is that on Tuesday morning, the U.S. and European models indicated a major change in the weather pattern that would put the ridge currently in the western U.S. then over the central U.S.
This would suggest above normal temperatures and below normal rainfall in the Midwest during the six- to 10-day period. This would deplete soil moisture and increase stress on corn and soybeans, but especially filling soybeans as most of the corn has pollinated. We went with this solution because of model agreement but with low confidence.
But the midday run of both models went back to a ridge in the western U.S. and a trough in the east. The models continue to suggest this pattern in the overnight run. This would suggest a continuation of generally favorable weather in the Midwest with enough rain to maintain adequate soil moisture and no severe heat.
According to DTN Analyst Todd Hultman, the changing weather forecasts in the last two days had an impact.
"The quick change in the six- to 10-day forecasts was felt in this week's grain trade as December corn traded up 5 1/4 cents Tuesday, but then fell back 7 cents on Wednesday," Hultman noted.
"For soybeans now setting pods, November prices were up 28 cents on Tuesday's hotter and drier forecast, but then gave back 17 1/4 cents Wednesday. Wednesday's lower soybean price was also partly related to news of a possible increase in tariffs against China, but there is no question that prices are sensitive to forecast changes this time of year," said Hultman.
Traders may also be watching crops in other parts of the world.
We continue to see an unusually persistent hot and dry weather pattern in northern Europe. This has already had a significant impact on the winter wheat crop and is currently affecting the corn crop.
The Indian monsoon is in a break in the major west-central oilseed areas. Currently soil moisture is adequate, but is being depleted. Latest guidance indicates another seven to 10 days of rather dry weather. This situation bears watching.
Michael Palmerino can be reached at Michael.firstname.lastname@example.org
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