• HEADLINES: Chicago slides on wetter midday GFS weather forecast for IA/W IL/TN late next week; Brutally hot through the Plains/limited rain; Chart selling accelerates.

• Chicago futures are mostly lower at midday on bearish technical momentum and weather-related long liquidation ahead of the weekend. Traders are waiting to see which extended range weather model is correct before placing any new bets. The bulls are worn out by the inability of the market to rally and are getting out. The bears are pleased with the break and argue that any early August rain can still produce a trend line yield. Following weeks of on and off again weather, traders are worn out and waiting for the August USDA Crop Report.

• It is the stale long liquidation that is pulling Chicago values lower at midday. US farmers are having a hard time understanding the late week Chicago decline other than to suggest that the “rain had better fall, and fall soon to preserve their crop yield potential”. Another 10 days of hot/dry weather is not what is needed to produce trend corn/soybean yields. That early August rainfall is so important in preserving good US corn/sorghum and soybean yield potential.

• Chicago brokers estimate that funds have sold 4,500 contracts of corn, 2,500-3,200 contracts of soybeans, and 1,300-1,500 contracts of wheat. Funds have sold 3,100 contracts of meal while buying 2,900 contracts of soyoil.

• Mexico purchased 100,000 mt of US soybeans. But other US demand is slow/quiet. China purchased soybeans from Argentina this week, while US vessel loadings indicate that China could take more than 1.0 million mt of US corn in Monday’s inspection report. US corn exports on Monday could return to 60-70 million bu and stay at an elevated weekly level into the end of summer.

• Typhoon In-Fa is expected to produce heavy rainfall for Taiwan and Coastal areas of Central China in the province of Zhejiang on Sunday. The Government there has raised their flood warning risk to the second highest level calling on local ministries to take preventative measures. Flooding this week struck Henan and likely adversely impacted 15-17% of China’s 2021 corn crop. No damage assessments for the Chinese crop are offered by the Government tapping down on information flow to stymie rising inflationary pressures.

• Brazilian corn prices are just below their record high at over $8.00/bu as domestic end user reach for a sharply curtailed 2021 winter corn harvest. End users understand 2.5-3.0 million mt of corn imports are required for the domestic market with traders estimating that Brazil purchased 17-20 cargoes of Argentine corn early this week. Elevated imports from Argentina and the US are forecast while the Brazilian corn export pace slide to 20-21 million mt. Brazil will fall to the world’s third largest exporter in 2021/22, behind Argentina.

• We estimate that US good/excellent corn/soy condition ratings will hold steady or decline 2% on Monday. Spring wheat ratings hold steady at a low 11%.

• The midday weather model is wetter across Iowa/West Illinois than what was offered overnight. The model tries to forecast several ridge riding storm systems that produce isolated to widely scattered showers across MN/WI this weekend and then IA/MO/IL late next week.

• The ability of the model to forecast ridge-riding storms more than 24-48 hours in advance is poor which produces a low confidence rainfall forecast.

• The one forecast certainty is brutally hot temperatures that exist for the next 9-10 days across the Plains/W Midwest. Highs in the 90s to low 100′s will be commonplace with some areas enduring 105-110 degrees. The hardest hit states will be Kansas, Nebraska, and the Dakotas. Crops in these areas will be under extreme stress. The Iowa rain will help, but the area covered will not be extensive. The GFS forecast may be overdoing the heat, but it is going to be hot in the Central US.

• It is an important weather weekend with the market extracting weather premium from price for the past 2 days. Whether this extraction is right is debatable. Extreme heat/limited rain for the us Plains/Canadian Prairies is a certain forecast. And the Central US ridge is not going to go away during August, the forecasts offer high odds that it will stick around without tropical storm development.

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