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GRAIN MARKETS: Crops have higher day, lower week

Tour results give wheat markets a late-week lift.

Crops closed with small to modest gains on Friday, but they still closed lower for the week as early-week losses were too large to overcome.

For corn and soybeans, a lack of threatening weather this week and next week in the Midwest keep a lid on prices. Wheat markets were higher again after a crop tour found lower yields in the spring wheat, but the markets were still lower for the week.

The weekend forecast is mostly dry for the Midwest, while the northern Plains may see a few showers.

Weather forecasts show drier conditions the next few days for much of the Midwest after recent storms. The latest 6- to 10-day (Aug. 2-6) outlook is mild and dry for most of the Midwest, while the 8- to 14-day (Aug. 3-9) outlook favors seasonal temperatures for the Midwest, with dry conditions for Iowa and Minnesota and wetness for Indiana and Ohio.

The dollar was lower in the afternoon and earlier set a new 13-month low. Equities traded both sides of unchanged, with the Dow Jones industrials up about 10 points when the crops closed.

Gold was up about $8/oz. Crude oil was higher again and the highest in two months after a government report Thursday showed a larger-than-expected drop in weekly supplies.

Exports (U.S. Department of Agriculture and Reuters data) show that Iraq tendered to buy 50,000 metric tons of wheat from the U.S., Canada or Australia. The tender closes on July 31, with offers remaining valid until Aug. 6.

Corn closed nearly unchanged to leave September under key moving averages. December moved above the 200-day and is resting near the 100-day. Corn likely got some help from the higher wheat markets.

USDA early this week lowered corn’s crop rating two points to 62% good/excellent condition, which was close to trade forecasts. However, investors have reacted to the expected mild weather for the Midwest and bearish technical signals.

Thursday’s actual volume was 243,067 Open interest in Thursday’s firm market decreased by 3,187, with September’s down 4,909 and December’s up 1,814.

September corn settled at $3.74-1/4, and new-crop December was up 1/4 cent at $3.88/bu.

What to Look For: The corn harvest began this week in the South and should soon gain traction in eastern Texas.

Soybeans had good gains and have recovered much of what they lost early this week. New-crop November remained lower for the week but is now above key moving averages with an RSI near 57.8.

Other oilseed markets were higher. Winnipeg, Man., canola for November moved higher for the third day as hot weather in the western prairies threaten the crop.  Europe’s rapeseed went higher to finish at a two-week high.

Thursday’s actual volume was 192,974. Thursday’s open interest in the higher market decreased by 4,715, with August’s down 13,936 and November’s up 5,337.

August closed up 6 cents at $10.00-3/4, and new-crop November rose 5-1/2 cents to $10.13/bu.

What to Look For:  Mild weather appears ahead for Midwest soybeans, which are entering or are close to entering seed production.

Spring wheat was higher again to lead the winter wheat markets up. The crop tour results confirmed the forecasts for a smaller crop this year.

Late on Thursday, tour participants put the average spring wheat yield of 38.1 bu. per acre versus 45.4 a year ago. Social media for much of the week carried tour pictures of sparsely populated fields of poorly developed spring wheat.

Forecasts put scattered showers in the northern Plains during the weekend, but the rain will not make up for fewer acres and the drought damage from early in the growing season. Winter wheat is mostly harvested in the central Plains and Midwest.

September spring wheat remained under the 20-day moving average but above other averages and had a RSI near 53. Harvest in the Dakotas is about two weeks away.

Thursday’s actual volume was 84,627. Open interest in Thursday’s higher soft red winter wheat market decreased by 2,787, with September’s down 2,583 and December’s down 101. Kansas City, Mo., hard red winter wheat’s actual volume on Thursday dropped by about 7,400 to 33,124, with open interest up 3,051.

Chicago, Ill., September soft red winter wheat closed up 1-1/4 cents at $4.81/bu. Kansas City September hard red winter wheat was unchanged at $4.81. Spring wheat for September rose 4 cents to $7.40-1/2.

What to Look For: Weather will be key as spring wheat heads into next month’s harvest. Hot weather could shrivel kernels before harvest. Next week’s forecast has chances for above-normal heat in the Dakotas and Montana.

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