Grain Report with Technicals

Markets

MARKET HEADLINES

Quick Editorial: grain trade was very choppy overnight but the market finds itself on the high side this morning, holding at least tentatively above recent move lows; the bulls need a wholesale weather change to really get any bounce going but have yet to see that develop. Increasing temps next week are once again a concern here for corn and soybeans, but rain systems continue to move through and keep crop conditions elevated at historically high levels.
Moreover, next week marks the start of the first wave of private yield estimates (led off of course by INTL FCStone on Monday), and the trade will no doubt be looking for some impressive numbers to kick off the official reporting season—certainly at or above the USDA's current yield figures.
UkrAgroConsult raised their 2016 Ukraine wheat production estimate, from 23.3 to 24.8 million tonnes, thanks to increased planted acreage figures.
Private grain growers group Orama this morning estimated French wheat production at just 30 MMT for 2016, down from last year's 41.0 MMT record, with yields plunging due to heavy rains and a lack of sun in the late spring.
Chicago-based analysts AGR Brasil told Reuters yesterday that they expect 2016/17 planted soybean acreage in Brazil to rise 2%, to 33.8 million hectares (83.5 mln acres), with an initial production range set at 98-108 million tonnes.
The North Dakota Wheat Commission wheat quality council tour going on this week showed yields running below strong numbers from the last couple years, in the first day of the tour. May/June drought has affected some areas to the tune of 40% below-normal yields, with other spots above-average. The Day 1 yield came in at 43.1 bushels per acre, down from 51.1 bpa on the first day last year, and below the 45.0 bpa five-year average.

WEATHER UPDATE

Rains were scattered around the fringes of the corn belt over the past 24 hours, including the southern Plains and belt through the OH River Valley, the SD/NE border, and the Dakotas into northern MN. Those individual systems will start to come together into the heart of the corn belt by tonight, and provide solid precipitation coverage for the great majority of corn and soybean areas right up into the weekend. 6-10 and 11-15 day maps vary a bit today but all show plenty of normal or above-normal precip chances in various parts of the Midwest. Temps are looking a bit warmer for the 6-10 day time frame today, moderating back closer to normal levels past that.
Showers will continue in China corn & soy growing areas in the coming days, but nothing to cause additional damage in the most heavily-flooded areas.

FUNDAMENTAL UPDATE

Today's chart shows the highest-rated national corn crops for this comparable date, really since 1994—there were five crops rated 76% good/excellent or higher in the first nine years that crop ratings were issued, starting in 1986. Of the six previous years listed below (all at 69% g/ex or better at this point), the final yield wound up at an average of 5% above the (conservative, straight-line) trend since 1995...

- Soren K.