Soybean Prices Tank Tuesday, Corn Down Daily Limit on Wetter Weather Forecasts

Wet weather forecasts across the Midwest caused commodity prices to tank Tuesday, with soybean oil and corn hitting the daily limits lower.

Forecasts for later this week also point to much of the Midwest receiving rain, including drought-stricken portions of Iowa, South Dakota, Nebraska and Minnesota. The moisture relief will hit at key pollination time for the 2021 corn crop.

"In the last 24 to 48 hours, there's not been much in terms of rain, but South Dakota had some good rain and central western portions of the state in the major production areas," Kirk Hinz of BAMWX told AgriTalk's Chip Flory. "The eastern Dakotas, western Minnesota, portions of Iowa, there hasn't been much rain so far, but it is raining right now. So as rain is moving through the area, we'll get those measurements in here shortly. It is raining and the forecast is calling for rain."

Friday evening to Sunday evening. WOW! Not in stone from this chair. NOAA QPF for Iowa, Illinois. Max too far north? Iowa, Iowa, Iowa, location, location, location. Stay tuned important rains for Iowa, E SD indicated still from new Tuesday afternoon QPF from NOAA! pic.twitter.com/bAZcZaIROV — Allen Motew (@QTweather) July 6, 2021

At a time when traders are focused on the weather, forecasts turned promising for the Corn Belt, with Allen Motew of QT Weather tweeting out NOAA's latest forecast. The updated forecasts indicated portions of Iowa could see more than 5 inches of rain from Saturday, July 10 through Monday, July 12. 

While the forecasts play out the remainder of the week, Michael Clark of BAMWX told Flory that more rain will be needed in portions of Iowa and Minnesota. 

"When we when we look at this dating back to April, a lot of the the heart of Iowa, southern Minnesota is still about 10 inches below normal rainfall," Clark said on AgriTalk. "So, while this rain is very timely and beneficial, it's not going to wipe out the drought by any means. The forecast going forward, I do think we're going to see a widespread two to three inches of rain. And there can be locally higher spots. That northeast Iowa area is pretty much the driest right now in terms of year to date rainfall, and they're looking to get a pretty good widespread rain to move through there."

The market volatility could continue, as CME Group issued expanded price limits for Wednesday.  According to Reuters, daily trading limits will temporarily expand to 5.5 cents for soyoil, $1.50 for soybeans and $45 for soymeal as CME widens limits for the entire soy complex when any one product triggers expanded limits.