Missed some market news this week? Here's what Bryce Knorr and Ben Potter have been following this week.

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December futures gapped higher overnight on forecasts for warmer and drier weather, with some models hinting that setup could last this month. While slow-developing fields need heat, there’s always a chance it could be too much of a good thing. Soybeans and wheat followed higher even as financial markets remain nervous about slowing global growth.

Grain futures open soft overnight and saw persistent selling overnight. While USDA lowered its rating of the soybean crop slightly Monday, corn overall improved, while forecasts for next week stayed hot but turned wetter. Outside markets are also causing traders to head to the sidelines, with stocks lower around the world following losses Monday on Wall Street.

Forecasts for a week of fairly hot and mostly dry weather aren’t stirring much interest overnight, though the outlook is providing some support to futures. While some weather models show the heat easing in the second week of the outlook, traders appear cautious ahead of Thursday’s supply and demand report, which will incorporating controversial June 28 acreage projections into its production estimates for corn and soybeans.

Futures drifted lower across the board overnight, digesting gains from Thursday’s big rally. With July USDA reports history, traders turn attention back to weather, which looks hot and dry in many areas for a week and perhaps longer. Trade news with China is also in the news today as negotiators try to restart talks while squabbling about purchases of U.S. farm goods.

Feedback from the Field

USDA updates its forecast of production, supply and demand on July 11. But the agency’s estimates for the corn and soybean crops will be mere statistical guesses. The real story of the 2019 growing season may take months to emerge. Both yields and acreage are big question marks this year, according to farmers posting Feedback From The Field.

Crop progress

USDA reported 57% of this year’s corn crop is now in good-to-excellent condition as of July 7, up a point from the prior week. For soybeans, USDA marked 96% of the crop as planted, up from the prior week’s tally of 92% but behind 2018’s pace of 100% and the five-year average of 99%. Each of the top 18 production states is at least 88% planted. Winter wheat crop condition climbed to 64% in good-to-excellent condition, up a point from last week. For spring wheat, 56% of the crop is now headed. Spring wheat crop condition, meantime, rose three points to reach 78% in good-to-excellent condition.

USDA is now pegging the 2019 U.S. corn crop at 13.875 billion bushels, slightly ahead of the agency’s June tally of 13.680 billion bushels. Average yields remain unchanged, at 166.0 bushels per acre. For soybeans, USDA made moderate cuts, moving production estimates from 4.150 billion bushels in June down to 3.845 billion bushels. Average yield potential declined to 48.5 bushels per acre. USDA revised its all-wheat production estimates from 1.903 billion bushels in June to 1.921 billion bushels in this month’s WASDE report.

Exports

Not much data stood out in the latest weekly grain export inspection report from USDA, out Monday morning. Grain prices are dialing in small losses as traders instead turned to the agency’s monthly supply and demand report later this week.

A lackluster round of export data from USDA Thursday morning raised additional questions about China, according to Farm Futures senior grain market analyst Bryce Knorr. Soybeans found 4.9 million bushels in old crop sales, plus another 4.8 million bushels in new crop sales, for a total of 9.6 million bushels for the week ending July 4. Corn export shipments reached 44.7 million bushels last week. Wheat export shipments reached 24.3 million bushels, climbing above the weekly rate needed to match USDA forecasts

Outlooks

Basis outlook - Transportation on the river system is slowly returning to normal. Tugs are adding barges as water recedes, though they’re still not able to put together normal tows. But basis on the river and elsewhere is far from normal, reflecting on-going concerns from the wet spring and start to summer.

Wheat outlook - The wheat market benefited from the June rally in corn, but those gains masked trouble in the market that’s become all too obvious in July. What strength there’s been in wheat came from a tight situation in Toledo that distorted the market prices headed into harvest.

Corn outlook - It didn’t take long for USDA’s July 11 production, supply and demand report for 2019 crop corn to be fed to the shredder. No one took the numbers seriously, likely not even the economists that put them together.

Soybean outlook - Sometimes what we don’t know is more important than what we do know. For soybeans this year, next to nothing is really certain. That could stimulate rallies to profitable levels, but it doesn’t guarantee them. And passing up chances to sell, as hard as it will be to pull the trigger, could lead to pain down the road.

Market recaps

Grain futures are mixed this morning on profit-taking from Thursday’s big rally. With USDA’s latest numbers mostly just statistical guesses, traders are focusing on steamy weather outlooks and uncertainty trade talks with China.

With weather forecasts turning hotter and drier, corn and soybeans took the opportunity to grab significant gains Friday, rising double digits in today’s session. Wheat was also in the green, thanks to some spillover strength from other grains.