Grains are solidly higher in overnight trading:

Sept Corn + 15 cents/bu (5.71)

Dec Corn + 14 ¾ cents/bu (5.67 ¼ )

Nov Soybeans + 24 ¼ cents/bu (13.97)

Sept Chi Wheat + 15 ¼ cents/bu (7.13)

Cdn $ +0.00065 (78.435 cents)

WTI Crude Oil +0.24/barrel (66.66)

Grains have been higher from the opening bell last night.  Yesterday’s weakness in grains was a function of WTI Crude Oil being down over $5.00 per barrel and the US equity markets being sharply lower, with the Dow trading down as much as 1000 points.  The COVID Delta variant, and the possibility of it wreaking havoc on the global economic recovery is what got outside markets defensive yesterday.  Grains could not help but be affected by the outside weakness, despite the fact that nothing has really changed for grains from a fundamental perspective.

With Crude Oil down 5.00/barrel yesterday, soybeans were the first grain that gave up initial gains and then turned sharply negative.  Soybean oil is very adversely impacted by weakness in crude oil, as the biodiesel demand for vegetable oil is such a critical component for the soybean complex in general.  Ethanol and therefore corn demand is also obviously impacted by weak crude prices, but not to the same degree as soybeans/soyoil.

Weather forecasts this morning are also feeding market bulls.  Forecasts offer an extended period of dry weather, wit heat building eastward from the Northern Plains into the Western Midwest.  The 11 to 15 day forecast now amplifies a Central USA high pressure ridge which should provide extreme heat for both the Plains and entire Midwest.

USDA Weekly Crop Conditions were expected to show improvement, but any crop good/excellent “gains” were not as good as expected, with corn ratings unchanged (65%  good/excellent), soybean ratings up 1% (60%), and spring wheat ratings down 4% (11%).  Weather forecasts this morning make it less likely that there will be any significant improvements to crop ratings in coming weeks.

Technically, grains look very strong this morning.