Grain markets received a mixed update from the USDA in the latest Supply and Demand report.
In the June 10 report, corn ending stocks were lower than expected, coming in at 1.1 billion bushels, 150 million bushels lower than the May report. Soybeans, however, finished with higher than expected ending stocks at 135 million bushels, a 15-million bushel jump higher from May.
“Old-crop soybeans were the biggest lower following the report,” Brad Peterson of Total Farm Marketing said. “They dropped about 20 cents and traders are expected to continue shifting open interest out of the old crop and into the new crop contracts.”
With the June WASDE report out of the way, weather is once again taking center stage. Drought conditions throughout much of Iowa have left a significant weather premium in the market. While the U.S. Drought Monitor map looks tough for those Iowa regions, other areas in the Corn Belt aren’t having to deal with quite so difficult conditions.
“We have seen a slight expansion of the dry areas, but for the rest of the Corn Belt, it looks to be in pretty good to better shape than two months ago,” Peterson said. “It’s going to be the main focus of the market for at least the next month or two.”
Rain forecasts over the June 13 weekend saw grain markets plunge by as much as 20 cents in corn and 40 cents in soybeans to open the week, displaying just how much a rain could save the crop. Peterson said producers he’s talked with are indicating the crop hasn’t taking a dire turn yet in terms of overall condition.
“We’ve heard their crop looks OK at this point for now, but they are going to need some rain soon or stress is going to start to show,” Peterson said. “The western Corn Belt areas have seen about 50% or worse of their normal precipitation in the last month.”