In the overnight session the grains are trading lower with corn down 2 1/2 cents, soybeans down 9 1/4 cents and wheat down 4 1/2 cents by the morning pause in trading. The outside markets are also trading lower with crude oil down $1.20, the U.S. dollar down .22 cents and the mini Dow Jones average down 1 percent. Today is first notice day for September grain contracts.
The grains could continue to move lower this week as optimal weather helps finish off the grain, however we believe that corn could show relative strength in a weakening grain complex. Planalytics, lowered its corn yield forecast by .4 bushels per acre to 166.8 bushels per acre on Friday. This is below the USDA estimate of 168.8 bushels per acre, but a couple bushels per acre higher than the Pro Farmer forecast a couple weeks ago. We believe that the USDA is more likely to move corn yield lower in the September report than higher, and the warm temperatures triggering rapid maturation of the crop will only rob yield potential in the eastern parts of the grain belt. Planalytics soybean yield was increased last week up to 46.2 bushels per acre, just shy of the 46.9 bushels per acre forecast by the USDA in the August report.
Over the weekend Iowa received precipitation as the moisture passed eastward from the South Dakota. Over the next 5 days little if any precipitation will assist the filling grain. Exceptional coverage is however expected in the 6-10 day outlook and more precipitation covers the Midwest in the 8-14 day forecast. Chances of an early frost are still low. Temperatures in the 6-10 day forecast remain above average for the majority of the central to eastern grain belt.