Market Commentary > Weekly Crop Commentary - 4/30/2021

Weekly Crop Commentary - 4/30/2021

Apr 30, 2021

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Welcome to the end of April and what a month it has been with grain prices that have made enormous gains in the past two weeks. Both old crop corn and bean futures are trading over a dollar higher as the volatility continues to bring new money into the market. China has continued to surprise the market with additional corn purchases while at the same time canceling summer bean boats with Brazil due to ASF and reduced crush margins in Asia. It is very difficult to say what is going on in China. While all this has occurred, we also have confirmation that up to three boats will be imported from Brazil to US ports in the coming months with beans. Meanwhile, we continue with concerns of reduced carry-over stocks and the anticipation of USDA increasing exports in the upcoming May 12th crop report. When you add dry weather in the major Brazil corn growing region as it reaches critical growing stages, you get fund buying like we haven’t seen in years. As if all that wasn’t enough, the trade is also very concerned of possible effects of La Nina weather event could have on crops in the US this summer. Local basis continues to remain strong as farmers attempt to get spring fieldwork completed while local demand competes for bushels. What a difference a year makes, and this may not for the faint of heart as it feels like the ride may just be getting started. Please continue to be safe and have a great spring planting week!

 
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Good afternoon and welcome to the end of April.  During the first half of the week, we did see lots of planting progress take place.  It will be interesting to see where the USDA has planting progress on Monday night because it seemed like everyone was planting hard.  Most in Marysville are received ½ to ¾ of an inch of rain, but there are some reports of south of I-70 getting well over 1 inch.  This will likely keep guys out until late Saturday or Sunday, but next week does bring more chances of rain.  We will soon find out.

Grain markets were active again this week making new highs, but lack of new bullish news prompted a quick retreat.  The domestic bean basis is really starting to heat up as crushing margins here continue to be good, but we have seen weakness in international crush margins.  There are some rumblings that China canceled some June/July beans from Brazil.  Basis levels in Brazil did take quite a hit this week, so there is likely some truth to this.  Corn basis has been rather steady this week as end-users still have ample coverage but look for some wild moves as we get into the summer.  Especially if we have a dry weather event take place to threaten the new crop.  

This week was a reminder as to how important open sell orders are.  We had several bushels that were priced in the night trade that did not hit during the day session.  As always have a great weekend and enjoy the sunshine and warm temps.
 
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Another week and we are finishing with April.  Extreme volatility for the markets, at this writing, it is about the same levels as a week ago.  Speculators getting out of their positions to maybe get back in come Monday.  Needed rains also gave the market a chance to take a breather.  Planting progress was 17% on Monday I would guess that number will double in the coming Monday’s report.  South America is still struggling with their weather problems.  Locally, a frost warning is out for Saturday morning, hopefully, the forecasters will miss this prediction.  As always, be safe out there.    
 
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Happy Friday! It has been a slower week here as farmers are busy planting. We received some nice showers yesterday that helped the already planted crops. While out driving around this week, I noticed that we have corn and soybeans starting to sprout. According to StoneX morning comments, commodity demand remains strong and the Brazilian safrinha corn crop is lacking moisture. Matt Blasdel with StoneX also mentioned the following in his comments today, “Do not expect much new news coming out of China as the county will be on its ‘Labour Day’ holiday until Thursday.” Reminder that the next WASDE report will be released May 12th and our Upper Sandusky location is still taking up to 30 on vomitoxin. We hope everyone is enjoying the sunshine and has a wonderful weekend!
 
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Good afternoon! A lot can happen in a couple weeks’ time. I was lucky enough to enjoy a two-week vacation and I came back Monday morning to cash corn having gained almost a dollar and cash soybeans gaining a buck fifty in that time! After hitting eight-year highs, momentum slowed midweek, though we seem to be ending the week on a high note with double-digit gains this afternoon. It’s not surprising we saw volatility and profit-taking this week after such an extraordinary rally. Adding to future volatility, CME’s daily price limits expand starting Monday. Gains and losses could come in larger sums. Corn’s daily limit has been 25 cents and will increase to 40 cents. Soybean daily limit moves from 70 cents to $1.50 per bushel.

Global corn supplies are still a concern as dryness in Brazil has been problematic for their safrinha corn crop as it heads into pollination. On April 5th, 92% of their crop was rated as Good, but that has been dropping weekly and conditions came in at just 40% Good this week. There is no relief in sight for them in the 10-day forecast either.

Remember to give us your target offers, even if they seem far-fetched at the moment. Sometimes those levels will hit at 2 a.m., for example, and we don’t want you to miss those opportunities to get bushels covered. Have a great weekend!
 
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What a wild week for the grain markets.  We saw corn and soybeans trade at the highest prices in almost 8 years.  When we have prices at these levels the swings can be wild on a daily basis.  It is not going to get any better as trading limits change on Monday; corn will go to 40 cents and soybeans to a $1.00.  So there is the possibility that you could go to bed at night and you wake up and soybeans could be a $1.00 higher or lower.
 
I have been talking to my customers that have old grain left to price and talking about the risk vs. reward today.  If you have a price target in mind I highly suggest you get an offer into your grain buyer.  As an example, this week we saw soybeans trade higher overnight and his $16.00 offer filled; by the end of the day, we closed at $15.64.
 
You have been rewarded for your patience with your old crop grain and have seen it move 3 to 5 dollars higher since last summer, don’t try to squeeze a few pennies out of the market and lose a dollar.
 
New crop continues to work forward with old, as the market moves higher and you feel comfortable in selling, add to or begin getting some new crop sold, as we have no idea how this all comes to a head over the next few months.
 
 
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Good Afternoon, another week has passed, and what a week it has been in the grain markets. The trading range in July corn from the high to the low this week has been .65 cents per bushel. In July soybeans the trading range this week has been .76 cents. Corn has been going crazy and beans are not far behind. The weather in Brazil continues to be dry and it has been reported this week that 60% of the second crop corn is under some degree of stress. This morning's weather update for Brazil shows that the 6-10 forecast will continue to be dry. Traders will continue to pay close attention as to where we go from here. USDA will be out on May 12th with updated carryout numbers for the 20-21 marketing year as well as our first carryout numbers for the 21-22 marketing year. That could fuel the bulls again but we will just have to wait and see. The bean carryout continues to be very tight. I found it interesting that I received a call this week from a crusher wanting to see if they could unload one of our bean barges at Cairo, Illinois instead of it going all the way to the Gulf for export. They needed those beans to keep one of its crush plants running. That’s a sign that beans are starting to tighten up here in the interior. We need as many corn & bean acres as we can find as we enter into the start of the 2021 growing season and the market continues to entice you the farmer to do that. So where do we go from here? That’s a very good question. Time will tell. I will leave you with this quote that a very wise person told me once. “ If common sense was only common.” There is a lot of truth to that comment. The cure for high prices is high prices. If we could just have a good balance and a fair price instead of extremes, in the long run, would be more beneficial than really high high’s only to have really low lows. But that never seems to be the case. So for now, enjoy the ride!!! Have a great weekend.


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