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Soybeans, grains jump on hot, dry weather | Thursday, July 29, 2021

Hot weather moves into eastern Corn Belt.

CME Group’s agricultural markets surged Thursday as hot and dry weather persists in the U.S. MIdwest.

Soybean futures for November delivery closed up 16¼¢ to $13.77¼ a bushel, soymeal was up 50¢ to $358.60 a short ton, and soy oil gained 1.48¢ to 64.88¢. 

December corn added 5¢ to $5.54 a bushel. 

Chicago wheat jumped 16¾¢ to $7.05½ a bushel, while Kansas City wheat surged 16½¢ to $6.76 a bushel. 

Extremely hot weather is forecast for much of the U.S. Midwest through at least the end of the week. In parts of eastern Kansas and central Missouri, heat indexes are expected to hit as high as 113°F. Fahrenheit today. 

Heat warnings and watches have been issued from central Nebraska southeast to the Gulf Coast, and east into Indiana, according to the National Weather Service. 

Roughly 58% of the U.S. soybean crop was in good or excellent condition at the start of the week, down from 60% a week earlier, the Department of Agriculture said. About 64% of the corn crop earned top ratings, down a percentage point from the previous week. 

Spring wheat, however, was only 9% good or excellent as of Sunday, down from 11% a week earlier. Last year at this time, 70% of the crop had earned top ratings. 

Export sales of soybeans and corn plunged in the week through July 22 while wheat sales improved. 

Exporters sold 132,000 metric tons of soybeans to unnamed buyers for delivery in the 2021-2022 marketing year that starts on Sept. 1, the USDA said in a report. That’s the first report of sales of 100,000 tons for any commodity in almost a week. 

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On Wednesday, the CME Group’s farm markets closed stronger.

At the close, the Sept. corn futures closed 1/4¢ higher at $5.49 3/4. New crop Dec. futures settled 2 1/2¢ higher at $5.49. March corn futures finished 3¢ higher at $5.56 1/2. 
 
August soybean futures ended 13 1/2¢ higher at $14.32 3/4. 

Sept. soybean futures closed 3 1/4¢ higher at $13.70 1/4. New crop November soybean futures settled 1 1/2¢ higher at $13.61 1/4.

Sept. wheat futures closed 14 1/2¢ higher at $6.88 3/4. 

Sept. soymeal futures finished $2.70 per short ton lower at $355.50.

Sep. soy oil futures closed $0.54 higher at 64.93¢ per pound.

In the outside markets, the NYMEX crude oil market is 0.77 higher (+1.07%) at $72.42. The U.S. dollar is higher, and the Dow Jones Industrials are 92 points lower (-0.25%) at 34,970 points.

Jack Scoville, PRICE Futures Group, says that today’s price movement is calm. 

“Wheat is up a lot as the crop tour goes through North Dakota and finds not much. Corn prices are hanging in, caught between the wheat rally and the selling in soybeans. Soybeans are a demand issue as demand is not ramping up yet. The trade remains uncertain about the growth of the soybean and corn crops, due to uncertain weather and production prospects. But, the weather seems to be fading as a reason to buy these days. I expect choppy markets for a while now,” Scoville says.  

Bob Linneman, Kluis Advisors, says that bullish investors may soon be looking for news to trade.

“Grain prices closed well off their intraday highs on Tuesday. Front-month corn ended the day down 1 penny after prices had a 20¢ range on the day. August soybeans ended trading on Tuesday up a nickel after posting a 30¢ range for the day. Is this a sign that traders are growing weary of the long side in the grain market? The crop condition ratings report on Monday afternoons will slowly start losing impact on prices as we progress through August,” Kluis stated in a note to customers. “What will the bulls have for news when that happens?”     

He added, “Weather forecasts for August appear to be turning more normal compared with what was seen in July. If this pattern holds, then it will be hard for the soybean bulls to keep prices at current levels. Even though the balance sheet is tight, traders are more likely to take a break from the long side if August weather looks normal.”

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