Grain markets follow the pattern of selling sharply lower after crop report.

Grain futures overnight did the classic sell off sharply the day after a USDA crop report. They are 100%, 6 for6, with last night's overnight double-digit selling losses. But there is another statistic behind that, 100% of the time on the last 5 crop reports, after 2 or 5 days of selling, the corn market came back and made new contract highs. The futures markets are not trading the future but are living in the present, embracing radars of rains in North and South Dakota, ignoring the fact that the upper Midwestern corn belt is falling apart. A cold front is producing showers/storms across the Dakotas, which has produced rainfall of .25-1.25″. Like Tuesday, radar estimates are likely overstating the overnight rainfall. Crop ratings for corn will be down 3-5% on Monday, as the key growing areas continue to sit in the heat and miss the rains. Whether you're looking at the euro or the GFS models, they will not have much rain in the next 10 days. This is the last day of the index fund roll which will offer support to July futures contracts. 1st notice day is on June 30th, and traders remember the strong rally in late April/early May as the shorts did not want to hold their positions with cash markets trading at premiums. Broad swaths of the Midwest will endure heat/dryness for another 10-12 days. The 2021 June weather pattern is drier/hotter than 2012 with the forecast offering limited respite. This is no place to be selling breaks. The upside price risks are substantial. The EU/Canadian/GFS forecast models offer below to much below normal rain for the Central US. Following a trend that extends backwards for months, the GFS model is the wettest while the EU the driest. The EU/Canadian models have limited rain for a large swath of the Midwest/Plains over the next 10 days. Illinois/Indiana are included in this arid weather trend. The GFS has some rain, but totals of .1-.8″ fall well below normal. Iowa crops in particular need rainfall, and the 10-day forecast is dry. The forecast models agree that a hot/dry weather pattern will continue across the Western and Central US into June 22nd. A tropical system is causing the models to fit in the extended 12-15 day period. Still, there is no indication of a return of normal rainfall and near to below normal temperatures. Temperatures stay well above normal, with highs in the N Plains and W Midwest ranging from the mid 80's to the mid 90's with the warmest readings for the W Midwest. Cattle futures ended firm yesterday, and a firmer start for feeder cattle is expected today with the lower grain complex. Thursday's cash trading was slow, with sales limited to Nebraska at $120 or steady with earlier week sales. The boxed beef market was mixed with choice softening while select continued to rally. The choice cutout slipped $.40, and select gained $2.53. The June WASDE report was supportive for the cattle and beef markets. Production was increased by a slight 65 Mil Lbs but was more than offset by a 115 Mil Lb increase in exports.