No real surprise, BIG gaps in c, s, w.
Let us revisit at 8pm cst
Thanks tjc,
Previous discussion on this:
https://www.marketforum.com/forum/topic/86654/
https://www.marketforum.com/forum/topic/86654/#86952
Crop conditions, updated today 7-10-22:
https://www.marketforum.com/forum/topic/86945/
This is part of the reason that we are not continuing higher and making new highs for this sessioner after the huge gap higher and instead, have backed off close to the open right now.
The just out 18z GFS has rains coming back in during week 2 with some weak northwest flow, especially for the ECB.
That's not alot of rain but it's been increasing a bit the last couple of runs.
A trend like this could turn the weather bearish again but for the moment, it's just making it slightly less bullish.
Prices have come a long way really fast(corn +50c and beans +1.25 since the lows, I think it might have been just 2, maybe 3 trading sessions ago.
Key places in the cornbelt got 2+ of rain last week and a week with no rain is not going to hurt them.
Regardless, it seems hard to imagine that the gaps will be filled unless crude would drop $10+ and the forecast would turn much wetter.
Thank you for the weather update---a hint of rain! For some, a hint wont help---for others frosting on a big crop.
Gaps most likely will not fill, perhaps WU, KCU, and/or MU.
Report tomorrow---if it is bullish, could be a near term high, especially if weather reports keep fluctuating.
Cotton was only modestly higher---supply no factor if no demand.
Open is the low, so far, cz, sx, and boz
SX made a new low by a couple c and cotton just barely.
CZ near the open/lows.
Not predicting where we go the rest of the night or Monday, just observing/reporting.
The cotton crop was last rated at just 36% gd/ex mainly because #1 grower TX was 48% P/VP and a disaster.
Not sure how adding more hot/dry to TX is going to impact the market which is already trading a disaster.
The rest of the South/Southeast is actually doing OK to good and the weather there should be favorable.
When will the next gfs report be out?
C, S way off highs and have not had much enthusiasm since 845est
The 3 wheats have stabilized nearer their lows than highs,
tjc,
It comes out every 6 hours as well as the European Canadian and UK Model every 12 hours.
There's a GFS and CFS long range models too that come out once a day and European long range that comes out twice a week?
At 8:30am, when we open and the funds do their jockeying and huge buying/selling, they could have a completely different idea compared to what traders tonight think
Dec corn has already traded almost 34,000 contracts in just over 3 hours which is very impressive for the evening. SX at 14,000.
Good morning, MarketForum
Bulls must feel disappointment.
As of the 745am halt, c, s, 3 wheats have gaps; sm, bo, o, r, do not.
I am confident MetMike will update weather before the resumption of trade. Buying/selling before halt may, may not, have been wise. (Obviously, selling 30/45 minutes after the open was ideal.)
Thanks tjc,
Sorry that I can't be available to update every hour of the day but I appreciate your confidence in me.
No changes actually to the forecast or maps since early this morning...........or yesterday evening for that matter.
The crop condition report may reflect the benefits of last weeks huge rains in many locations and could be one reason we aren't stronger. There's also rains falling in the central cornbelt. Light rains and they were expected by me but its tough to get super bulled up on hot/dry when that happens.
https://www.marketforum.com/forum/topic/83844/
The easy, no brainer money play was late last week before the market dialed in the new pattern. Now everybody and the market knows its mostly dry for at least 10 days and we are looking at........what's next.
Will the pattern continue the rest of Summer? Extremely bullish
Will it last for less than 2 weeks? Temporarily bullish
The latest models still have the dome backing up and letting northwest flow in INSTEAD OF building in the dome so its on top of the Midwest. This is the biggest reason we can't keep going higher and it was the look that I have yesterday evening.
2 days from now, the late week 2 pattern will be more clear(maybe) and we might not be trading close to this price anymore:
Crop conditions. This could be huge!
https://www.marketforum.com/forum/topic/86945/
Again, the latest models have the center of the heat ridge farther west/southwest. In late July/August, this has usually meant a dry-ish pattern too but in recent years, the assistance of climate change (from higher moisture and the micro climate caused by the evapotranspiration of tightly packed corn plants over the main growing region) has allowed it to be wetter than previous years.
Another factor that I can't control or gauge is how much the big money decides to speculate with in the grains because of bullish weather.
The earlier in the growing season, the more risk premium and more damage weather can cause and more attractive spec positions look.
Each day that passes is one day closer to making the crop and one day less of being able to hurt it.
For instance, if this were a month earlier, we'd have potentially an extra month of this weather which could make or break the crop in some places.
Last weeks rains didn't exactly MAKE the crop but it locked in a minimum yield for most places that got 2+ inches of rain.
This is the mentality, generally speaking and can be offset with enough hot/dry in the forecast and we can still make new highs for the move but its going to be much tougher than it was the first time we got there with speculation.
Precise, wonderful updates and explanations.
Dec Corn still has a one cent gap; Nov beans about 3. All others no gap, and in Wheats, huge 30 up and down !
Need a very decent sized account to venture in the grains!
(Pardon me, I did not mean to put you on the spot or dictate your time--mea culpa)
No problem tjc,
I told you that I appreciate your confidence in me and explained that I just can't be here to update all day and night for free but will do my best and actually ENJOY sharing it a great deal with somebody like you that is thinking with a very similar mindset on trading.
Actually, the bigger problem with me is that i enjoy it TOO much and will get carried away and ignore things that I should be doing around the house.
tjc, you should have provided the charts to show the gaps for us. just a thought.
Gap in beans was just closed.
There's a USDA report out on Tuesday at 11am. Not supposed to be a huge report or show much change but stocks are extremely tight/low and slight changes, in that environment can result in amplified price reactions.
Crop report was a tiny bit bullish for C, with unchanged conditions vs expectations of a +1% improvement.
Beans dropped -1% vs expectations of +1%, so that was a tad bullish vs expectations.
https://www.marketforum.com/forum/topic/86945/
Mid July, averages a drop of 1% or even 2% but last weeks rains helped large, key areas of the corn and soybean growing area.
Extremely strong DX is bad for exports and price of ag products, especially C, S and W!
Despite the 8-14 day being pretty dry, I think the market is seeing a bit more rain than the NWS.
Rain on latest 0z GFS ensemble just out. This is mostly week 2, especially later week 2 rain.
That would be the 1.5 inch band for the inside contour in the ECB and WI.
1 inch in IA/MN. The farther west we go, the less rain there is.
See how much drier that the Monday NWS outlook was below?
I would bet the 8-14 day outlooks get wetter and wetter as this week goes on. If not and they stay dry because the guidance goes back dry.....then the C and S market should rally sharply!
Otherwise, we will be more likely to go down not up as the crops get closer and closer to being made........1 trading day at a time.
No changes to the previous forecast.
Rains continue to creep back in late week 2 to the central and especially ECB, however the WCB is going to be in some big trouble with intense heat and no rain and even in the ECB, its not especially bearish......yet.
The forecast has not changed but crude is plunging and the USDA crop report was bearish.
Crude down almost $9 meant that, outside of a bullish shocker on the USDA report......grains were going lower. today.
Weather has not changed that much from the previous views above...which started with the LESS bullish Sunday evening view but still bullish.
The WCB is going to be in some big trouble later this month and in August if the pattern doesn't change.
After today's bloodbath, the bulls will be very shaken but the weather is still bullish.
Crude is down more since the grain close.
However, if it gets hot and dry enough...and continues into August..... so that the market sees plunging crop conditions in August......there will almost be no choice but to go higher.
Any more backing up west of the heat ridge on models.....and the highs are in.
I’ve been sitting on the sidelines but I will admit to being surprised at the price crash in the face of such hot and dry forecasts. Of course the way these plants are engineered, it wouldn’t surprise me if someday corn isn’t used to pull water out of the air to provide fresh water for people. These plants are so resilient.
Jim,
The higher CO2 makes plants more water efficient(stomata don't open as wide to get CO2-so less water loss) and more heat tolerance.
Here are some good charts, as bear requested.
First the beans:
https://www.barchart.com/futures/quotes/ZSX22
The top chart shows the bearish, downside breakaway gap when we opened after the holiday.
When that was filled at the end of last week, it became a selling exhaustion, gap and crap technical signature...BULLISH.
On the open this week, we had a very bullish UPSIDE gap higher, that almost left an extraordinarily bullish weekly island of trading prices behind. But the highs were right after the open!! A warning sign.
But when that was filled on Tuesday, we had the signature of a buying exhaustion gap and crap left behind and a bloodbath for the bulls yesterday.
Prices today, Wednesday, saw a modest recovery after spiking to new lows for the week earlier and finished slightly higher for the day.
If these were new lows for the move, it would be a potential reversal higher.
It could also serve as a double bottom with the lows of last week.
Regardless, the clear daily trend is DOWN.
Long term, we could have had a double top with the Oct. 2012 high from the last widespread Cornbelt drought that year, when we traded to just under $18 earlier this year.
Corn charts show almost the same technical formations/patterns.
https://www.barchart.com/futures/commitment-of-traders/technical-charts/ZCZ22/overview
The top chart shows the bearish, downside breakaway gap when we opened after the holiday.
When that was filled at the end of last week, it became a selling exhaustion, gap and crap technical signature....BULLISH!
On the open this week, we had a very bullish UPSIDE gap higher, that almost left an extraordinarily bullish weekly island of trading prices behind. But the highs were right after the open!! A warning sign.
But when that was filled on Tuesday, we had the signature of a buying exhaustion gap and crap left behind and a bloodbath for the bulls yesterday.
Prices today, Wednesday, saw a modest recovery after spiking to new lows for the week earlier and finished slightly higher for the day.
If these were new lows for the move, it would be a potential reversal higher.
It could also serve as a double bottom with the lows of last week.
Regardless, the clear daily trend is DOWN.
Long term, we could have had a double top with the Oct. 2012 high from the last widespread Cornbelt drought that year, when we traded to just over $8 earlier this year.
Here's the latest weather:
What is still NOT showing up in the NWS products there........but the market knows is the pattern continues to feature the heat ridge backing up/retrograding to the west and introducing increasing northwest flow into the Midwest.
If it continues, I STILL contend the NWS 8-14 day outlooks will start increasing rains, first in the ECB.
They actually added rains in the week 1 forecast today:
https://www.wpc.ncep.noaa.gov/qpf/p168i.gif?1530796126
The market ALWAYS, with few exceptions, reacts to these changes a couple of days before the NWS has them in their meteorologist interpreted products.
https://www.marketforum.com/forum/topic/83844/
This was the week 3/4 CFS forecast that helped crash the grains yesterday(and ng for awhile).
Cool and wetter.
https://www.marketforum.com/forum/topic/83844/#83949
USE THIS LINK: https://www.cpc.ncep.noaa.gov/products/people/mchen/CFSv2FCST/weekly/
Latest 18z GFS total rain forecast for 15 days. If we're to go much higher, we need to take most of this rain out and stop the heat ridge from backing up farther west:
Mid level map below.........heat ridge retrograding west. Midlevel northwest flow picking up in the Midwest towards the end of July.
The market saw your post Mike. Good call or should I say, thanks for the weather analysis.
YW Jim. Weather becoming LESS bullish despite the modest gains at the moment.
2 week rains from the 6z GFS earlier this morning. Other guidance has less rain and the WCB still looks like its going to be in trouble. Regardless, the heat ridge is backing up/retrograding west on most model solutions and allowing northwest flow into the Midwest.
I saw some things on Twitter this morning that it looks like La Nina is actually getting stronger?
Please copy that for me Jim.
The La Nina is WEAKENING!
The NWS is finally adding some rain to their 8-14 day outlook for the ECB.
Near normal rain for IL/MO/IN and above rain for OH.
As mentioned lots of times, the WCB is going to be in trouble. The heat ridge will actually shift to the Rockies. If it shifts any farther west, it will start turning pretty bearish......however, it could shift east again and turn very bullish, the way it looked over the weekend.
Regardless, heat fill will hurt corn yields even with good rains!
If we have increasing rains, it will be hard for corn to stay supported but with big heat, it will make it harder to go down.
https://www.marketforum.com/forum/topic/86047/#86223
More wonderful insight on heat fill here:
https://www.marketforum.com/forum/topic/74802/
Corn Yields
Started by metmike - Sept. 12, 2021, 12:01 p.m.
Heat fill for corn August 22, 2021
Started by metmike - Aug. 22, 2021, 8:31 p.m.
https://www.marketforum.com/forum/topic/74068/
Heatfill coming up for corn
Started by metmike - June 25, 2020, 7
https://www.marketforum.com/forum/topic/54571/
Heat Fill for corn
Started by metmike - Aug. 14, 2019, 5:51 p.m.
https://www.marketforum.com/forum/topic/36888/
Thanks extremely much Jim!
I wasn't questioning whether you saw it but I wanted to see who was saying it and their reasoning.
This is a credible source and I understand why he said this.......there are some models that do have the La Nina that won't die, increasing a tad again later this year. This long lived La Nina is also why the topics for this time of year, are the coolest in 22 years!
https://www.marketforum.com/forum/topic/86627/
So there's justification based on some models. However, we are running out of subsurface cold anomalies and I have my doubts that we will stay La Nina forever but will respect this view and considering the La Nina has lasted MUCH longer than anybody thought (3rd year).....the dynamics have been under forecast, so I will be anticipating this possibility......vs thinking we will become neutral with low confidence previously.
This is why my favorite posts are those that disagree with me and have a solid reasoning. I just became better tuned into the La Nina thanks to you! Appreciate it!
Recent model forecast below that supports the La Nina stengthening a tad this Fall:
The 18z GFS was quite a bit more bullish than the previous runs with the upper level ridge position in 2 weeks several hundred miles farther east.
We'll see if a trend starts or if this was just typical model variation at long time periods. Most of the other models did not have this earlier..........but the Canadian model DID shift the dome farther east by a hundred miles+ with it's previous solution.
No worries Mike. As Ive stated many times before, I have 100% respect for your weather analysis. And I think you know me well enough that if I didnt see it, I wouldn't say it. Glad it was of interest to you
