Market Commentary > Weekly Crop Commentary - 4/9/2021

Weekly Crop Commentary - 4/9/2021

Apr 09, 2021

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The grain market has been well supported this week on the heels of the USDA prospective planting report released March 31. With corn coming in below the anticipated range at 91.1 million acres, we have added twenty-five cents to the futures market. Soybean acreage came in at 87.6 million acres and we have added an additional dime to bean futures as we approach the latest USDA supply/demand report today (4/9). Cash basis remains strong in Ohio and will continue working to keep bushels moving to the processor this spring. With the inverted futures market on both corn and beans, the basis market will have to do all the work this summer likely causing a premium for Ohio bushels. The market will continue to monitor exports to China as much of our carry-over will depend on their ability to handle the massive number of bushels, they have on the books for this marketing year. The new longs in the market appears to be the funds buying, anticipating possible weather issues in the coming months. It sure feels like this is going to be a roller coaster ride this spring and summer as weather forecasts and geopolitical concerns will impact the daily market trade discussion. I hope everyone was able to enjoy the Easter weekend with family and friends. Please continue to be safe and have a great week!
 

 
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Good afternoon.  What a nice start way to start the month of April.  We did see some corn and soybeans get planted this week.  Not a great deal, but there were a few that got started. We did see a great deal of tillage, fertilizer applications, and burndown going on though.  There is nothing quite like the smell of freshly tilled dirt this time of year.  With all the field activity going on we finally saw a reduction in grain receipts. We have struggled all winter to keep the doors open, but we have taken our yearly projection in a 6 month period so that’s part of the reason also.  Corn basis continues to not show a great deal of strength as the pipeline has ample supplies and the recent run to new highs brought a fresh round of selling from the farmer.  Bean basis is also mixed as the export market is getting weaker from the reduced demand, but the domestic market is heating up as crush margins are good.  The dryness in the west is really beginning to gain attention.  The wheat market bounced nicely this week due to dryness in the northern plains stopping spring wheat seeding.  We are also watching some cold temps in Europe that could hurt their crop, both situations will have continued monitoring for more developments.  As always have a great weekend.
 
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Despite the threat of colder weather, the next couple of weeks, many acres of corn and beans were put in the ground this week locally.  Old crop movement slowed with the fieldwork being done.

USDA was out at noon today.  Corn had a decline of 150 million bushels in the carryout because of the increase in usage and exports. Beans crush demand along with usage fell but the exports increased leaving the carryout unchanged for this month.  Wheat carryout increased 16 million bushels because lower feed use and imports cuts.  This was as expected, now the attention will be on the planting season and the acreage needed for the tight stocks of corn and beans.  
 
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Good afternoon! It looks like there is more rain in the forecast for this weekend and fieldwork will presume next week. For those still working on cleaning out their bins, our Upper Sandusky location is currently taking up to 30 ppm vomitoxin. The April WASDE report was released at noon today. Pre-report predictions had the U.S. carry out average trade estimate for corn at 1.396 billion bushels and soybeans at 0.119 billion bushels. The final numbers came out at 1.352 for corn and 0.120 for soybeans. In other news provided by StoneX, “The Ever Given is being held by the Egyptian government until the ship owners pay $1 billion in compensation for blocking the Suez Canal. The owner of the ship said companies with cargo on the ship must pay a fee to retrieve it and to help cover legal costs.” We hope everyone had a wonderful time celebrating Easter last week!
 
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Happy beautiful Friday afternoon! Corn has continued its uptrend since the March 31st Prospective Planting report. Both old crop and new corn have made fresh contract highs just today. With a nickel basis improvement, our spot corn bid has improved about 26 cents since last week’s close. Soybeans remain in their 30-40 cent trading range but are narrowly managing a 1-2 cent gain on the week. July wheat has also improved about 30 cents, mostly due to dry weather concerns in planting spring wheat in the northern plains.

Today’s WASDE report did not throw out too many surprises. The soybean ending stocks came in at 120 million bushels, as the traders expected. The USDA increased corn usage and export numbers, tightening the ending stocks to 1.352 billion bushels, a little more bullish than the average guess, but not by much. The traders now look to weather and weekly planting progress reports for fodder over the coming weeks. Have a great weekend and be careful out there in the fields!
 
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What a nice start to April.  We have corn and soybeans both planted in Champaign County.  Not everyone has started but the early birds have some in the ground.  They have said the conditions are the best they have planted into in several years.

Corn and soybeans continue to work higher as we see demand from around the world for our products.  We are dealing with a corn export market like we have not seen in maybe 2 decades.  This is changing some logistics from what we have seen in recent memory as the river is a player in the market today which is helping keep local basis supported.  I am not sure how we keep old corn in our bins as we are looking at almost a 20 cent inversion from May to July.  Basis will have to do some of the work but it is really hard to carry corn forward into that kind of an inversion.

Customers have been asking where new crop prices are going to go.  Today I believe that we have limited downside risk, unless China comes in and cancels purchases that they have made.  If we have planting or production issues this spring or summer we could be in for some very exciting markets ahead.  Keep an eye on weekly planting progress and crop conditions as we move forward, this will give us an indication of how this crop is going into the ground.  Historically if we have a good planting season corn acres tend to increase.  Today both crops are profitable under normal yield conditions and we know most farmers would rather raise corn than soybeans.
 
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Good Afternoon, I hope all of you had a wonderful Easter. Today at noon brought us another monthly USDA S&D report. Nothing earth-shattering in the numbers today. Corn did tighten up from 1.502 to 1.352 billion bushels but with the recent rise in the CBOT, that number was already priced in. Or at least that’s my position. Beans stayed the same again and came in at 120 million bu for their carryout number. I believe that we still may be too high with that number but the USDA is not willing to take it any lower at this time. Currently, as I write this column the corn market is up .02 cents and beans are down .10. When all is said and done we just don’t have a lot of wiggle room this growing season for any problems and it's my belief that any weather problems or perceived problems can get the market excited in a hurry. Weather wise here in the NE part of Ohio we are as dry as I’ve seen it for this time of the year in a long time. I have heard of a few guys planting just a little bit but almost everyone is sitting on the sidelines as of today. A lot of fertilizer has gotten spread and some field prep has also gotten done. Once the date on the calendar is good for planting we should see the crop get put in the ground pretty quick providing that weather holds. Corn & Bean basis is flat to slightly softer. The end user has had no trouble drawing corn out of the farmer's hand at these current prices and with May-July corn spread showing an inverse, there has been no reason for the farmer to hold this crop. The biggest thing in my thoughts that we need to stay aware of and keep our eyes open about is the continued concern of ASF coming back in China’s hog herd. If it was to get out of hand that could have a huge impact on the size of our 21-22 bean carryout. Have a great weekend!!!!


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