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Midway through day 3 of the Crop Tour has shown us the best corn we’ve seen so far, but soybean pod-counts remain a concern with extreme heat sweeping across the Midwest this week.

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Grain Market Recap: 

Grain prices rose in conjunction with temperatures across the corn belt today. Each of the major grain contracts closed in positive territory for the day. With temperatures breaking into triple digits in a number of states, concern about crop health began to mount. Our first material glimpse at the impact of this heatwave likely will not come until Monday’s Crop Progress report. But, the extreme temperatures observed across the Midwest could serve as a bullish tailwind for the grain complex through the remainder of the week. 

Corn: 

December corn was able to build on yesterday’s late session strength after successfully defending our 4-star support pocket between 472-476. The contract moved sideways through the duration of the overnight session, but immediately moved higher at the open. The most encouraging part about today’s trade was that the rally continued into the close. The high for the day didn’t come until 1:08, when the contract traded up to 492-2.The foundation is set to retest the 500 level for the 8th time this month. So long as temperatures remain this high, and significant rain doesn’t enter the forecast, the December corn contract should exude some strength through the remainder of the week. For the day, December corn settled at 490-4, up 11 cents.

Soybeans: 

After trading down to, and bouncing off of, the 200 day moving average during the overnight session, November soybeans were able to recoup almost all of yesterday’s losses. Moreover, we traded through the psychologically significant 1350-1355 resistance pocket. The contract settled at 1360-4, up 14-4 cents today. As mentioned in previous recaps, this heatwave likely bears a heavier impact on the soybean crop than the corn crop. Sustained extreme temperatures have the propensity to materially damage soybean yields. Significant declines in G/E ratings in Monday’s Crop Progress reports could serve as a catalyst for the November soybean contract to fill the gap from July 31st between 1375-4 and 1382-4, and ultimately test 1400. 

Wheat: 

The September wheat contract was also able to build off of yesterday’s gains. Today’s price action had a little more conviction than yesterday, by closing in the top-third of its trading range and clearing through the 603-607 pivot pocket. If we see continued strength across the grain complex through the remainder of the week, the September wheat contract could push towards our 3-star resistance pocket between 622 and 632.

 

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