The week's weather looks to further talk of the drought ending. WXRISK.com the weather site has the Western grain belt Wednesday through Thursday with 60% coverage up to 1 inch of rain in Iowa, Nebraska, and all of Kansas. Thursday and Friday the Eastern grain belt of Illinois, Indiana and Missouri see 50% coverage of .50 to 1.00 inch. Our hard red winter wheat states have rain all three days. 65 to 70% coverage of 1 to 2 inches in Kansas, Colorado, Oklahoma and Texas. The coverage in the wheat belt is pretty hefty on totals but wheat only needs a moist topsoil for planting emergence and wheat's a crop that needs only marginal rain totals compared to corn and beans. Rain in the Midwest isn't a large total but it's the third week of rain especially in the driest areas of the Eastern grain belt. If the rains continue we will look for good soft red winter wheat acres to be planted in the Midwest after the corn and beans harvest. There is heavy rains expected in the Midwest on September 18 and 19 with a potential frost on the 19th over Minnesota, North and South Dakota.
Monday saw all three grains trade from lower to higher three times before finishing lower similar to today Tuesday. Corn holds zero profit from the August report break going into Wednesday's crop report, while beans hold 1.05 profit into the report. The reason beans are more bullish than corn into the report is, July was when corn made or lost its yield, and then made the August report more important to corn. The bean yield was determined in August, making the September report more important.
Here's a problem that could rise Wednesday off the report to be aware of. If the corn report comes out more bullish than expected, all the players sitting on the sidelines will pour in and up limit could easily be seen. On the reverse, should the bean report not be as bullish as feared, all those longs fat with profits will sell out, giving us a sharply lower move after the opening. And of course should we come in at or near the pre-report estimates, we look to sell a higher opening and look for profit taking by longs as demand comes to the surface of traders decisions with corn demand at a standstill and bean export, though up on the year, have been lower for two consecutive months.
Mondays crop condition report put corn at 22% good to excellent condition for the third consecutive week, versus 53% a year ago. We shouldn't expect any more of a change than 1 or 2% now until the last report. Thanks to hurricane Isaac that brought rain to the southern delta and Midwest. Beans, conditions improved to 32% good to excellent versus 30% the week prior, a low of 29% and under a year ago of 56% good to excellent. 36% of the crop is dropping its leaves and 4% harvest while corn sees 15% of the crop harvested.
Most of the beans harvested are in the southern delta with the Midwest harvest starting about two weeks. One month from today, the last corn and beans bushel will be in the bin and we will be solely a demand driven market unless the drought in Brazil continues for crop year number two. As for wheat, let the new crop season begin. Our new winter wheat crop is now 4% planted. We will keep watching weather in key producing states Kansas, Colorado, Oklahoma, Nebraska and Texas. Just about every news service has carried an article projecting the US as a major wheat exporter this year. Especially after Russia's drought cut their production 17% and Australia's drought has their projections at 22 million metric ton production versus 29 last year. These are all estimates, and these are two major US export competitors out of our way. Wednesday's big USDA crop report will be released at 7:30 AM central time.
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