Market Commentary > Weekly Crop Commentary - 3/5/2021

Weekly Crop Commentary - 3/5/2021

Mar 05, 2021

 

Alt TextThe grain markets continue to be supported with excellent demand and we find corn futures setting new contract highs today. Weather concerns; due to wet conditions in the southern hemisphere’s corn producing sector, are bringing the funds back to buying the market. A slow harvest continues to delay the loading of bean vessels in Brazil which has extended support to local bean basis. Crush margins continue to be improved and one must wonder what the summer will bring for domestic bean processors. The corn basis continues to improve with domestic ethanol margins gaining strength in recent weeks as crude moves higher and anticipated usage increases with spring travel. There is no question this roller coaster ride will be kept alive and well if any weather issues have the potential to adversely affect production.  

The USDA will be releasing the latest supply/demand figures on Tuesday and while we feel there should be some adjustments to the final carry-out numbers, most folks are not expecting much news. The average trade guess on corn today is 1.470BB, down 0.300 from last month with soybeans showing a modest adjustment from the February report at .117BB. The end of the month will bring corn and bean planting intentions with the current thought being 92.0 million acres of corn and 90.0 beans. Looks like we have a wet week ahead, however this past week’s weather sure has us looking forward to Spring planting. Please continue to be safe and have a great week!

 
 
Alt TextGood afternoon.  What a great week of weather we just witnessed. March definitely came in like a lamb. Any winter weather we get now will be short lived, or at least we sure hope it is.  Not much new news in the markets this week.  Wet weather continues to hamper soybean harvest in Brazil, and the line up of empty boats to load continues to grow. Many new sales will pretty much have to be US origin until the congestion clears a bit.  Corn shipments continue to gain momentum as we are making the switch from the soybean loading program to corn. A couple of notable’s from the week is the big confirmation of corn being changed from unknown destination to China on the export sales report. This just confirms that they need corn now.  The other is African Swine Fever is showing up once again. This needs continued monitoring as they really didn’t reveal the full impact the last time.  Basis levels for corn and beans are beginning to gain momentum. End users know that fieldwork is just around the corner and they want to be a full as possible going into the spring. The USDA will have updated supply and demand numbers out next week, and we will have to keep an eye on the South American prospects.
Alt TextSpringlike weather has customers itching to move grain, some need a few more days for the mud to clear up. Nice weather will continue next week with a slight chance of showers mid-week and the wind will be March-like by Friday (50mph gusts).  South America’s weather is continuing in the same pattern, making harvest in Brazil slow and shrinking Argentina’s crop.  

Corn exports were the lowest of the marketing year, beans and wheat were ok but this time of year Brazil is the mover of beans.  Grain markets continue the volatility waiting for the USDA Supply and Demand Report on Tuesday.  Call your local elevator to put target orders in for New Crop, at the time of writing fall delivered beans were at $12.04 and Fall corn $4.50.  
Alt TextGood afternoon and happy Friday! Overall, it has been a quiet week. Between South American concerns and tight soybean supplies, prices have been mixed. According to StoneX, “Corn export sales fell to a marketing-year low at less than five million bushels on the week ending Feb 25, the fourth straight weekly decline from the massive 293 mbu total in late Jan, and down from 30+ mbu on the comparable week last season. ‘Unknown’ canceled nearly 70 million bushels of corn this week but 41.5 mbu of that was picked up by China, bringing cumulative sales to China to 737 mbu so far in 2020/21. Only 278 mbu of that has actually shipped…” The weekend ahead looks to be chilly but hopefully, you all enjoy the sunshine!  
Alt TextHappy sunny Friday afternoon! We saw yet another volatile week in the grain market. Corn had a wide trading range of 25 cents this week, soybeans 57 cents, and wheat 23 cents. Locally, we saw nickel basis improvements in both spot corn and beans. With these improvements and 2 hours left in the trading week, cash corn is about a penny better than last Friday. Cash beans had an excellent run and are up about 25 cents on the week. July wheat is struggling this week with a nickel loss.
 
The export sales report was another dismal one for corn. We saw the 4th straight decline in corn sales, this one at only 4.6 million bushels, the lowest of the marketing year. Even though we are 23% ahead of the seasonal pace needed to meet USDA’s target (a declining percentage every week), only 44% of those sales are shipped. On Monday’s export inspection report, we did see the biggest shipment of the year, but we need to keep up that progress in the second half of the marketing year. Soybean export sales are also ahead of pace by 17% and those are 88% shipped with 6 months remaining in the year. Will we exceed USDA’s export target? Do we have enough beans to do that and supply U.S. soy demand? These questions along with poor South American weather are keeping soybeans on the uptrend. Have a great weekend and enjoy the warmer temps next week!
Alt TextI am always amazed at how fast the weather can change here in Ohio.  Two weeks ago we were pushing snow and making piles, today most of that is gone except for the piles.  I was able to get my motorcycle of out the garage and ride a couple afternoons in the last week.  We are seeing equipment get pulled out of the storage shed and prepared for spring.  If the weather cooperates, we will see something planted in the next month here in Champaign County.

The grain markets have seemed to found a range that they want to play in at this time. We have price movement but it is within a range that we have seen for the last 30 days.  Grain movement has been at a rapid pace from the farm to the elevator as the farmer likes the price he sees today.  We also have to be mindful that the corn market is inverted from here on out so someone is going to have to figure out a way to carry corn into the summer as the consumers of corn need corn every day.

We keep getting offers and seeing new crop corn and soybeans priced as we get to new levels.  As I have written in earlier comments we have a long way to go on the 2021 crop and with ending stocks for 2020 tight any hiccup and this market will get excited. The next 30 days we will see a lot if information as South American harvests and plants, planting intentions and who knows what out of Washington.  Have a plan in mind as we move forward to finish marketing your 2020 crop and get a good start on 2021.
Alt TextGood Afternoon, the grain markets continue in their sideways trading again this week. The markets bears cannot pull the market down very much ahead of the critical March 31 Quarterly Stocks & Prospective Plantings Report. Anytime we see a sell off we have been able to work our way back up. With another update on our carryout stocks coming on Tuesday and concerns of beans tightening up more it appears the bulls are not ready to give up yet. Farmer selling has slowed down some on both old and new crop but we continue to buy some on the rebounds each time. Now that we have turned the calendar to March and with a little warmer weather coming our way next week it will start to get farmers feeling the itch of starting another new year. With corn & beans at profitable levels for the 2021 crop year let's just make sure that we don’t let the our emotions take hold and set our goals to high at unrealistic numbers. I’m not saying to book everything today but lets not do nothing either. I would think that we need to be 30% contracted today on both beans & corn. Give us a call to discuss putting in some targets. As you get ready to go to the fields your mind is not set on watching where the market is its set on getting the crop planted so that’s why it’s important to have working targets out there. Have a good weekend and lets look forward to the warmer temps coming our way the first part of next week.


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