Corn prices turned negative Tuesday, but soybean prices rallied again in a reversal from early morning declines.
With today’s focus again on weather, here is FarmLead’s daily recap of grain markets and trading at the Chicago Board of Trade.
Western Corn Belt Suffers Dry Spell
Corn prices declined Tuesday despite ongoing concerns about worsening crop conditions and dry U.S. weather. While the July contract finished up a fraction of a penny to close at $3.92, the September corn futures contract finished down one cent to close at $4.01.
The December corn futures were down 1.2 cents to $4.13 a bushel. Today’s trade saw 245,756 contracts exchange hands.
The downturn comes a day after the USDA reported that crop conditions worsened last week. According to Monday’s progress report, 65% of the U.S. corn crop registered at good or excellent (G-E) condition. That figure is down from the 68% from last week.
The USDA also reported that 19% of the current crop is silking.
The crop condition reports will grow more important in the months ahead. Joe Vaclavik, president of Standard Grain, said yesterday that July progress estimates “don’t have much of a correlation to the final numbers.” 
Weather is a factor, and a frustration, particularly for anyone staring at a model.
Andy Shissler of S&W Trading weighed in on the weather yesterday. 
“From last year to this year, it’s totally different,” Shissler said. “We get a forecast, and they call for rain. And you get humidity, but you don’t get rain.”
Shissler said that scattered thunderstorms are hitting, but they’re also missing a lot of farms. He argues that we’ve seen enough misses for a long enough time that it’s going to be difficult for the USDA’s 170 bushels per acre estimate to actualize.
“The trade is going to start questioning [if] we [are] at 165 [bushels per acre],” Shissler said during yesterday’s Farm Journal Broadcast. “If you’ve got another week where [there’s] more heat around, they start talking a 160. If those are real or not, I don’t know, but the perception of it would really put a boost in prices.”
On the global front, Brazil’s national supply company Conab hiked its outlook for 2016-17 corn production.
The new expectation for 2016/17 to is 96 million tonnes, a 2.3% increase from the previous estimate of 93.83 million.
That uptick comes at a time that the nation is on the verge of having its largest-ever soybean crop.
India Soybean Crop In Focus
Soybean prices reversed from early losses to finish up on the day. The highest volumes were seen for the November delivery contract, which finished the day up more than two cents to close at $10.41 per bushel in Chicago.
The July soybean futures contract finished up on the day more than five cents to hit $10.25.
December soybean oil futures added 11 cents to finish at $34.28.
Concerns about quality and weather impacted trader sentiment.
Yesterday, the USDA crop progress report showed a decline in crops with good-to-excellent quality ratings. The figure decreased from last week’s 64% to 62% this week. The downturn outpaced consensus expectations for a reading of 63%.
The report also indicated that about 34% of the soybean crop is blooming. That figure tops the five-year average of 32% and is a noticeable uptick from the 18% reported last week.
Over in India, soybean prices saw their largest intraday decline in nine months as traders took profits off the table. Concerns about rainfall across the region have abated. Now, meteorologists are calling for more rainfall, a factor that could fuel oversupply in the market.
In Chicago, SRW Wheat futures contracts for September added 1.2 cents to finish the day at $5.51 per bushel. In Kansas City, however, September HRW contracts fell by a little more than 1.5 cents to finish near $5.55 per bushel.
The USDA report again showed another downtick in quality. Just 35% of the U.S. crop was rated good-to-excellent, down from the 37% reading from last week.
Hot weather continues to pummel the Dakota plains. The National Weather Service has issued a heat advisory as conditions in eastern South Dakota are expected to jump as high as 105 degrees.
Tomorrow, markets are anticipating the release of the World Agricultural Supply and Demand Estimates and Crop Production reports. The USDA reports will offer some greater insight into the broader challenges we’ve been discussing for South American producers and give us a bit better estimate of what we can expect from Chinese demand for the rest of the year.
The big numbers we want to pay attention to tomorrow are “Global Reserves.”
Today, we saw oil prices push higher after an inventory report indicated that European oil, gas, and other byproducts fell far more than analysts had anticipated. That report was a surprise at a time that global oil prices have been stuck in a range below $50.00 for some time.
On the agricultural side, the USDA has predicted that global corn, wheat, and soybean stocks will decline for the first time in five years. Bloomberg has suggested that the USDA is eyeing a cut to global wheat inventories.