Weather turns back dry, and China keeps buying
Corn and soybeans continued to move higher yesterday and overnight. The drought in Europe continues to stress crops with no relief in sight and the WCB will see more heat with less rain the next 2 weeks. The ECB will also be on the dry side but will not suffer the heat. We have the USDA report on Friday and as the week moves forward the sentiment gets more and more bullish. The lower crop conditions on Monday and drier forecast to finish August has analysts dropping their estimates. The problem is the USDA’s data was submitted August 1st so the last 10 days of deterioration will not be reflected in their numbers so a bigger drop may come in September. We look for modest cuts in US production but should see a bigger drop in the EU corn crop. This morning the CPI numbers were lower than expected with the energy component being the biggest driver of that lower reading. That pushed stocks higher and the USD lower. China was back in for soybeans overnight. For today watch 6.10 and 14.20 for support and 6.24 and 14.55 for resistance.