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Weather Main Driving Force in Soybean Markets Until August
We ended the week with a day of consolidation as we trade within yesterday’s range. Even though we were weaker today it was not a bad week for the bulls as we gained 20 cents (August contract). Weather continues to be the main driving force of the markets direction. With the radar lighting up with rain in central and northern Iowa last night and today some of the weather premium that was put in earlier in the week was pulled out today.
We anticipate weather will continue to be the main driving force behind the bean markets next major move until we get thought the critical pod filling portion of the growth cycle, which happens in August. July 15 was the midpoint for Iowa's soybean blooming. Allendale's crop model suggests the midpoint for pod set for the nation’s top soybean producer will average August 1. Even though the dryness issues plaguing portions of the Northern Plains, Iowa, Nebraska, and central Illinois is dominating the trade's attentions, traders need to remember that we can get too much of a good thing as parts of the eastern Midwest continue to get flooding rains, (Wisconsin, northern Ilinois, and parts of Illinois were hammered again last night) which is stunting the bean crop and causing disease problems.
Current model runs are calling for already soggy areas of the belt to get heavy rains into this weekend. As the saying goes “Beans don’t like wet feet.” This could lead to sudden death syndrome as well as yields loses that won’t show up until harvest. Sunday night's opening directions will dictate by the updated maps and how much rain fell over the weekend.
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