CROP CONDITION.............. Monday was, what Monday always is, this time of year. When grains price in the current weather. Well, lower prices were the results of a much broader coverage and rain totals. When markets closed Friday, rains look to hit the Western corner of Iowa, Eastern corner of Nebraska and southern half of Wisconsin. By Sunday rains spread to central Nebraska and Iowa and northern and central Illinois and Indiana. Rain totals in Illinois and Indiana were 2 to 8 inches. This is what makes trading into the weekend's so risky as markets are closed not allowing you to adjust your trades as weather is happening 24- 7. Here's how the weather by WXRISK.COM reads now. The big picture sees generally warmer than normal conditions with periodic heat blasts confined to the Western grain belt with Eastern grain belt with less heat but dry. This is what's expected after August 4. This means continue crop stress in Illinois, Indiana and Ohio. The near-term looks like a copy of last weekend with a chance of heavy rains Friday and Saturday on a narrow band from Eastern Nebraska, central and southern Iowa, central and northern Illinois and Indiana. Northern Ohio could see rain as well. If this forecast holds true into Thursday, we will see a break off this rally in prices as traders will fear the rain totals and coverage could expand, like last weekend. We should expect a correction off this rally as funds bank month-end profits as well. The question is where's the top of the rally that's coming from Monday's bullish crop condition reports. Monday's 3 PM crop condition report came out putting corn condition at 62% in good to excellent condition, versus 66% the week prior and 72% a year ago. Big losers were Indiana down 7% at 46% good to excellent, Ohio 48% down 7%, Missouri 55% down 8% and Pennsylvania 28% down 30% from the week prior. I said for two weeks Pennsylvania number was wrong and needed a sharp drop. States still too high are Tennessee at 80% good to excellent and Kentucky at 72%. They should be 15 to 20% lower. The USDA continues to play a shell game playing catch-up cutting sharply states they had to high versus some that were too low. The 66% is probably 6 to 10% too high for the weather conditions todate, but it's what the trade released. Soybean condition came in at 62% good to excellent versus 64 the week prior and 67 a year ago. Like corn, the bean comparison to the year prior just can't be. As last year was the best weather during planting and early emergence to this year possibly our worst. 62% is just too high all considering. Tennessee at 83% good to excellent is too high by 25%. Mississippi at 61% and Kentucky at 72% all needing to drop measurably, regardless of this weeks weather. Key producers read like this. Illinois 60% down 2, Indiana 47% down 6 and Ohio 51% good to excellent down 8. These are the key Eastern grain belt producers. The key Western grain belt. Producers are Iowa 80% down 2 and Nebraska 77% down 3 and probably 6 to 10% too high on both. Generally speaking, the last two weeks have seen the report 1% lower than the lowest pre-report estimates. This is because the USDA originally set crop ratings to high using 5 and 10 year averages. When the reality of the wettest and latest spring planting and early emergence weather had the average far too high especially with extreme bad weather issues in some states. This had the USDA taking what the week actually brought from the on farm survey then adding broad-based adjustments on the out of line states. So if weather this week looks to have traders calling for higher numbers on next Monday's report, figure it won't be as high and if lower is called for, then expected even lower. Technicals read like this. December corn support is 6.70 then 6.64. Resistance 7.00 then 7.10 and 7.22. November bean support is 13.60 with resistance 14.10. September wheat support is 6.70 and resistance 7.16.
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