"Dome of Doom" Weather Pattern to Hit Corn Belt - Why Don't Traders Care??

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🌡️ A massive heat dome is set to roast the Plains and Corn Belt next week, pushing real-feel temps above 100°F across the Ohio, Mississippi, and Tennessee Valleys. It'll dry out soggy fields but deepen drought stress elsewhere, with stormy edges threatening localized flooding and crop damage too.

🌱 Soybeans held steady Tuesday after two down sessions, with Nov26 parked at $11.42/bu. Corn slid for a third straight day to $4.37/bu on Dec26, even as fresh export demand offered some support.

💰 Input costs are easing, but farmers say it's not enough. Wisconsin growers point to lingering strain from Iran-war-driven fertilizer and fuel spikes, with some relief now coming from US-Iran peace talks—though next year's fertilizer costs already loom large.

🇨🇳 The US Soybean Export Council is leaning on quality to claw back Chinese demand lost to Brazil. Brazil now grabs over 60% of China's soybean imports versus just 23% for the US, a stark flip from a decade ago when both sat near 40%.

⚓ Russian strikes on Ukrainian ports near Odesa could slash the country's grain exports by up to 30%. With Ukraine accounting for a meaningful slice of global wheat and corn trade, exports are already running about 12% behind last year's pace.

⛽ E15 legislation cleared the House but faces a tougher Senate fight ahead. Minnesota farmer Tim Waibel says oil-industry opposition and an uncertain Senate timeline are the biggest hurdles, even as crop conditions back home look excellent.

Transcript

Dome of Doom

SPEAKER_01 0:08

Morning guys. It's Wednesday, June 24th, 5 24 a.m. Central Time. Grain markets are mostly higher this morning. December corn futures up one and a half at 438 and three-quarters. November soybeans up three and a quarter at 1145. July Chicago wheat up one at 587 and three-quarters. July Kansas City wheat up one and three-quarters at 620. September spring wheat up two cents at 6.19 and a half. We've got some potential uh weather threat uh kind of stuff brewing here. Why don't we start there?

SPEAKER_00 0:36

So a massive heat dome is expected to settle over the plains and the corn belt next week, sending temperatures into the 90s, while recent rainfall will boost humidity levels, pushing real field temperatures above 100 degrees Fahrenheit in some areas. The heat should help dry out regions that have been overly wet, but it will also intensify drought conditions in dry areas. The core of the heat dome is likely to center over the Ohio Valley, mid-Misissippi Valley, and Tennessee Valley for much of the week. The outer edges of the system could spark rounds of severe thunderstorms from the plains into the upper corn belt. Temperatures are expected to ease in the second week of July, but will likely remain slightly above average across the plains and the corn belt.

SPEAKER_01 1:19

I'll tell you what, in a lot of years, that would be a very bullish headline as it relates to corn prices. Midwest heat dome brewing prior to Independence Day. We've been told over the years, and I don't know if it's still true, 90% of corn yield variability is determined in the month of July. So if you roll into July with hot and dry weather, you would think that that would be problematic. This is how it looks on a map. This is 500 hectopascals geopotential height plus normalized anomaly. It's essentially a gauge of at atmospheric pressure. And this dome, what it does, the dome of doom, as I've always called it, it locks in heat and it locks out precipitation. So you're looking at a situation here where over the 4th of July, during that kind of period next week, it's like you're gonna see pretty minimal rainfall during the 8 to 14 day period. Um, all that blue stuff on this map from Crop Profit, if you guys are watching, that's all like, you know, less than half an inch of rain, trace amounts, probably nothing in a lot of those areas. Uh, the notable exception would be parts of Iowa and uh southern Minnesota. Temperature is gonna run well above normal during that eight to 14 day period. We're talking five degrees almost above normal across U.S. corn areas during the eight to 14 day period. So is this a weather threat? I don't know. Why is the market not concerned? Why doesn't the market care? I think it's because we've got rain in the forecast here for the next seven days. And if you notice, over the next seven days, you've got that band that goes across like the kind of southern-ish part of the corn belt, a lot of Illinois and Indiana, but it misses a lot of Iowa and a lot of southern Minnesota. But Iowa and southern Minnesota are the lone places that may actually catch rain during the eight to 14 day period. So when you look over the next two weeks in general and total, uh the rainfall amounts could actually be adequate, I guess, and um temperatures pretty much normal over the next seven days. This is so I I guess the reason the market doesn't care about this right now, and maybe it should, is past rainfall has been adequate or excessive, and uh we've got some more rain coming before all of this hits. This is a chart from our friends at Crop Profit. And if you guys are sitting on any sort of grain desk and are active in the markets, you should buy Crop Profit. It will make your job easier. Um, so over the last 30 days, U.S. corn areas are running a moisture surplus uh almost half an inch above normal over the last 30 days. And it's for that reason, I think, that the market is not concerned about this. Now, you guys can answer this question for me. Let's say you're in uh northern Illinois or one of these places that just got absolutely drenched uh with rainfall over the last uh week or 10 days or whatever. You would get that situation, and then you turn hot and dry over

Grain Price Action, Charts

SPEAKER_01 3:55

4th of July. Is that a favorable situation as it relates to crop production? It doesn't seem like it would be to me necessarily, but uh you guys let me know what you think.

SPEAKER_00 4:03

Soybeans were mostly steady on Tuesday following back-to-back declines in the previous two sessions. The November 26th contract held steady at $11.42 per bushel. Futures have been pressured in recent sessions by falling crude oil prices and favorable growing conditions across the corn belt. Corn futures moved lower for a third consecutive session, with the December 26th contract falling two cents to settle near 437 per bushel. Similar to soybeans, corn has faced headwinds from softer crude and favorable weather. Wheat futures also move lower, marking a third consecutive session of declines.

SPEAKER_01 4:36

Crude oil futures are down again this morning. The August WTI is down to 72.09. That's down a buck 12 this morning. So we're reverting back to like pre-Middle East conflict levels in the crude oil market. Uh flows through the Strait of Horror moves have uh increased drastically. There's still some conflict and a lot of stuff going on. But generally speaking, uh the market is comfortable with the idea that the situation is largely behind us. December corn futures look very poor. We're only a few cents from the lows that were posted earlier this month. Rain makes grain has been kind of the uh name of the game here. It's been raining a lot in a lot of places, perhaps excessively in a lot of places. Nobody cares as of right now about next week's Dome of Doom weather forecast. Maybe they should. I don't know. You guys tell me if it's gonna be a big concern or not. Uh heat during July is, you know, it's gonna be abnormal heat, but above normal. But to see stuff in the 90s, first week of July is not crazy or or um it's not a big anomaly, but the lack of rain paired with that could be an issue. The funds are building a net short. Um, we have a uh daily fund tracker tool in our email every morning that's sent out to the premium subs. And the funds were estimated to be net short, 69,000 contracts of corn at yesterday's close. So that's not necessarily a positive item. The soybean market is acting much better relative to the corn market or to the wheat market. The funds are still net long, although it's been that net long has been reduced drastically. Uh, China did make its first official purchase of new crop U.S. soybeans um last week, I believe, and we still got very strong domestic demand via the uh processor. HRW wheat futures have uh backed off and and they've backed off a lot. We've still been able to hold above that gap level at 609 and three-quarters in this July contract. The U.S. HRW crop is projected to decline 38% year over year, 804 million bushels last year, just 407 million bushels this year was the most recent estimate. And despite that, uh, we've still got declining prices. The spring wheat market is is maybe the worst actor here. Um, I don't know why. We've got some rain in the forecast for U.S. spring wheat areas. Ratings

Farm Input Costs

SPEAKER_01 6:35

are floating, I think around average-ish. Uh, perhaps the funds are puking the last of their remaining length, but this is probably the uh the ugliest looking chart that we've got here.

SPEAKER_00 6:44

According to a pair of Wisconsin farmers, the surge in input costs tied to the Iran war, particularly fertilizer and fuel costs, has put significant strain on margins. Some relief has emerged recently as both fertilizer and diesel prices have uh eased following U.S. Iran peace talks. While the pullback has helped, margins are still tight. There are already concerns about fertilizer costs for next year's crop. Both farmers highlighted the importance of less aid and improved demand, emphasizing the need for expanded markets through trade policy through trade and policies like E15.

SPEAKER_01 7:19

The American Farm Bureau Federation had some very good graphics in an article that they uh put out recently. The production cost as it relates to corn this year, their estimate was was revised upward from $917 an acre previously to $936. And they're talking $952 an acre for 2027. Uh soybeans, similar increase. I mean, pretty much across the board. You're looking at essentially the highest cost of production ever, I think. Um crop input cost to set a record in 2027, uh, same deal. It's just like across the board, everything is going to be as expensive as it's ever been uh to grow these crops. Meanwhile, the prices are not too dissimilar from where they were like, you know, 20 years ago. Um, here, look at this chart. So since uh 2005, the cost of production uh of corn is up 146%, soybean cost cost of production up 165%, wheat cost of production up 106%. And it's like it's like the whole inflation situation. And we understand the government continues to create money. Uh, we get involved in these uh, you know, 2008 situations. We got to bail out the banks, you get involved in a COVID, you got to print trillions of dollars. It all results in, and then you got all these supply chain issues. COVID was a big supply chain issue, uh, Strait of Hormoes, big supply chain issue. That all results in inflation. It's like everything has been affected by inflation except for the prices of corn, soybeans, and wheat. It's really uh pretty amazing and and extremely frustrating when you think about it.

SPEAKER_00 8:46

If you guys have not checked out our premium content, you sure need to do so. Joe, can you tell our viewer our viewers about some of our recent premium videos?

SPEAKER_01 8:53

What happens when China buys U.S. corn? It is my um opinion as of right now that China will buy some U.S. corn. And the reason that I say that, it was laid out in yesterday's video. But um this is a possible bullish wildcard in the market. And I talked about uh for what reasons and why and what happened what has happened in the past when China buys U.S. corn. I had some cool charts that included um Chinese buying patterns overlaid with corn prices. Um, this is something perhaps to be optimistic about. Chris and Shea were on earlier this week. They had a 45-minute discussion on navigating farm transition conversations. This has been for years now like the hottest topic in agriculture. This is something that's affecting uh the vast majority of our viewers. And for a lot of the younger crowd, like if you're in your 30s and 40s and you're the you're gonna be the next generation to take over, starting that conversation with the older generation is the biggest hurdle that you've got to get through. And Chris and Shea talked about how to how to start these conversations with the with uh call them the boomer generation or the guys in their 60s, 70s, 80s who uh just don't want to give up the reins and give up control. There's a right way to do it. And uh a lot of our subscribers found this video to be extremely useful. Ryan Bennis was on uh late late last week and we talked about the crop insurance situation and like kind of where these safety nets start to come in. You're gonna get cheap enough. If you get cheap enough in corn here, it doesn't make any sense to sell any for new crop delivery for a number of reasons. And Ryan put some math behind it. If you guys want to see the premium stuff, go to standardgrain.com. You can sign up this morning. This is a $50 per month subscription. You can cancel at any time. There's no other fee, no other obligation, nobody will try to sell you anything else. Um, if you are the farm decision maker in your operation, if you do the marketing, you buy the crop insurance, you pay the people, you're doing the transition planning, this is for you. It will help you to make decisions. Uh, one feature that we've added just recently is an audio only version of the uh premium videos.

Soybean Export Council Efforts

SPEAKER_01 10:44

So if you don't want to sit and watch the videos and you want to listen while you drive the truck or uh whatever, that's now available. So uh give that deal a shot this morning, guys.

SPEAKER_00 10:53

The U.S. Soybean Export Council is emphasizing soybean quality as it works to regain Chinese demand from Brazil. According to the council, U.S. soybeans hold a competitive edge due to higher protein content, greater consistency, and improved feed performance. Over the past decade, Brazil has steadily gained a larger share of the Chinese soybean market. In the first five months of this year, Brazil accounted for more than 60% of China's soybean imports compared to just 23% for uh the US and 10% from Argentina. While recent US-China trade deals are supporting a modest rebound in exports, they likely won't fully restore demand to previous levels.

SPEAKER_01 11:31

So the soybean export situation as it relates to the US and China specifically, it seems like it has more to do with politics than anything. China bought uh what were most certainly overpriced U.S. soybeans uh during the first part of 2026, late 2025. Uh, they bought them for political purposes. They could have bought Brazilian beans cheaper and they didn't. So the um the export situation moving forward, I wouldn't call it artificial necessarily, but we've seen some demand that probably wouldn't have been there otherwise. But at the same time, you know, the trade war shut off demand during uh like the harv, you know, pre-harvest, post-harvest window in the United States that probably should have been there. So it's like this this whole trade war thing

Russia/Ukraine Conflict and Wheat Exports

SPEAKER_01 12:12

with China has has really shifted demand uh for U.S. soybeans on the export front that that in in a way that wouldn't have happened in any other instance.

SPEAKER_00 12:20

Russian attacks on Ukrainian ports and vessels are threatening to significantly disrupt grain exports. The strikes, which have been concentrated around the Odessa region, uh could slash Ukraine's monthly shipments by as much as 30%, cutting volumes from roughly 6 million metric tons to 4 million metric tons. Heightened risks have driven shipowners to demand higher freight rates or avoid the region altogether. As a result, grain is backing up domestically, pressuring local prices and squeezing farmer margins. These disruptions could impact global markets as Ukraine accounts for about 6% of the world's wheat exports and 11% of global corn exports. So far this year, Ukraine's grain exports are already running roughly 12% below last year's pace.

SPEAKER_01 13:07

It's a story that we've been discussing on and off for four years now. And it uh there was a point in 2022 and even into 2023 a little bit where this thing really moved the market like day to day, and it just doesn't anymore. Uh, Ukraine's expected to account for only 2.9% of wheat production next year. However, they're expected to account for 6.6% of all projected global exports. The next chart is really kind of the uh money chart. Take this one to the bank when it comes to this whole situation. Russia-Ukraine combined wheat exports have not declined despite the ongoing war. They just haven't. I mean, look at this. You saw your biggest year of combined Russia-Ukraine wheat exports, uh 23-24 marketing year after the war had started, and we've stayed at relatively elevated levels uh since then. So despite all the conflict, the headlines, it's like the wheat exports just haven't

E15 Update

SPEAKER_01 13:56

uh really dropped off. Now, if you look at the Ukraine bars, which are the green, they have dropped off a little bit, but Russia has uh more than made up for that decline.

SPEAKER_00 14:04

According to Tim Wabel, a farmer in South Central Minnesota, the passage of B-15 legislation in the House was an encouraging was an encouraging step forward. The legislation drew bipartisan support from Minnesota's congressional delegation, highlighting the importance of E-15 to both farmers and the state's economy. However, Weibel expects the bill to face greater resistance in the Senate, where strong opposition from oil interest remains a key hurdle. Additionally, there is uncertainty over when or even if the Senate will bring the bill to a vote.

SPEAKER_01 14:35

Yeah, I think it in its current form, it appears unlikely that this thing gets pushed through. And even if it does, I have uh mixed feelings on what sort of impact it has on corn prices and demand for ethanol and all that stuff. Uh, what did Cal do yesterday?

SPEAKER_00 14:50

Cattle futures were lower, live cattle were 68 cents to a buck 35 lower, feeder saw losses ranging from uh 43 cents down to 228, boxed beef prices were notably higher yesterday. Choice was up 425 at $400.31, and select was up $547 at $381.06.

SPEAKER_01 15:06

The SP is up 15 points in the futures this morning. Uh bonds up just a little bit. The US dollar has been strong. The uh September 26 dollar index futures contract is up to 10146 this morning, and that is not a positive input as it relates to commodities. Crude oil now under $72 in the August WTI $71.87 last trade. Uh not necessarily helpful to uh our grain markets here. Everybody have a wonderful day today. We'll be back on Thursday.