CHICAGO, July 22 -- Chicago Board of Trade (CBOT) grains futures closed mixed over the trade week which ended July 21, as central U.S. weather and technical selling still weighed on crop prices.
CBOT corn futures ended moderately higher, as daily or weekly price movement is solely focused on central U.S. weather. The market has found an elevated price range based on the expanding drought across the Plains and western Midwest.
Trading will hinge almost entirely on rain in the western corn belt in coming weeks. Already intense dryness across the U.S. state of Kansas, Nebraska, South Dakota and North Dakota has capped national yield potential at 165 bushels per acre, and thus harvest lows have been raised to 3.60-3.70 U.S. dollars per bushel.
Based on the weather forecast, the 2017 U.S. corn yield can slip to 159-161 bushels per acre in early August. This would lower U.S. corn end stocks to 1,750-1,825 million bushels and open the market to a rally to new highs.
Wheat futures ended mixed with spring wheat higher, winter wheat lower, and they were largely range bound through the week.
The market has digested much of this year's decline in major exporter wheat production, and current prices are viewed as fairly valued. Major market changes in the next 30 to 45 days will now center on northern hemisphere corn yields.
However, analysts note that harvest is ongoing across Europe and the black sea, and so far harvest pressure has been rather limited. Their work suggests there's a strong tendency for world cash markets to bottom in the first half of August, and so this year's prices are assured to be much higher than last year.
Soybeans were mostly higher through the week on lower crop condition ratings and fund buying. After a record week of short covering, fund buying continued on building Midwest heat and limited rainfall across the western Iowa and southern half of Illinois.
Hedgers used the rally for sales, but at the end of the week, November soybeans were more than 20 cents higher with spot futures back above 10 dollars per bushel. Large parts of Iowa, Illinois and the Plains remain short on rain.
Crop ratings have been trending lower and based on last week's weather, analysts look for national good or excellent ratings to be 1 to 2 percent lower.
