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April 12th- Closing Market Commentary

04/12/2021
April 12th- Closing Market Commentary

Grains are low to close:

Corn -8 1/4 cent/bu (May @ 5.69) ß New crop unchanged as the acreage battle between corn and soybeans continues

Soybeans – 21 cents/bu (May @ 13.82)

Chi Wheat – 10 3/4 cents/bu (May @ 6.28)

Cdn $ -0.00225 (79.610 cents)

WTI Crude Oil +0.38/barrel (59.70)

The weekly grain inspections report was released today and was on par with expectations. The export quantity is still on track, but lighter than we have seen lately. Nothing to stimulate the markets today that’s for sure.

Corn export shipments were reported at a 7-week low, however, still above the 55.1 million bushels per week needed to hit the USDA target for the year. As of right now, corn export shipments to date exceed the seasonal pace needed to hit the USDA’s revised target by 77 million bushels. Soybean export shipments fell to a 10-month low, still surpassing the weekly pace of 9.7 million bushels per week needed to hit the USDA’s revised target. Soybeans are currently exceeding the seasonal pace to hit the new target by 227 million bushels. Wheat shipments exceed the seasonal pace needed to hit the USDA’s target by 22 million bushels.

In Million Bushels

Actual

Estimates

Last Week

Last Year

Corn

62.4

47.2-82.7

85.1

67.9

Soybeans

12.0

3.7-14.7

14.1

33.1

Wheat

16.8

11-20.2

23.4

17.6

The crop progress and conditions report was out at 3pm today. It showed corn planting at 4% (2% last week, 3% last year, 3% average), spring wheat planting at 11% (3% last week, 5% last year, 6% average), and winter wheat condition at 53% good-to-excellent (53% last week, 62% last year, 53% average). Texas and Colorado are really pulling the wheat conditions down, while Texas represents the majority of corn planted at 57% complete (the next closest state is 16%), and Washington has the majority of the wheat planted at 50% complete (next closest is 30%). These results were are fairly mundane and underwhelming for this time of year, but the reports become increasingly important the longer we go into the growing season as it greatly influences yield and therefore carryout.

The USDA also announced a set of flash sale announcements this morning:

-132,000 mt of soybeans to China for 2021/22

-110,000 mt of soybeans to Bangladesh (half for 2020/21 and half for 2021/22)

That totals 8.9 million bushels, but it is not enough to entice soybeans to further ration. Traders have been worried about what the reemergence of ASF in China means for soybean demand, so this new crop sale is reassuring (given it doesn’t force old crop cancellations).

The soybean sell of was led by weakness in palm oil, and therefore soybean oil. Changes in biodiesel mandates in Brazil are making temporary distortions in the market.

Weather, weather, weather…

Some of the Midwest is dry, but overall in the corn belt, the last 30 days were the most wet on record since 1979 . This includes areas of Kansas, Nebraska, Missouri, Iowa and Minnesota. This is great for the wheat in the ground, and therefore bad for the wheat prices.

Forecasts are showing the potential for SNOW in Kansas later this week in quantities up to 6-10 inches. This would not be great for the wheat crop, and could promote an increase in weather premium.

Northern Plains and Canadian Prairies are struggling with dry weather, risking spring wheat planting and yields. Forecasts of potential rains in these dry areas are pulling wheat prices lower.

Weather in Brazil has been fairly dry, allowing them to get their soybean crop off of the field, this is putting some pressure on old crop soybeans.

Funds were thought to be all sellers with corn and wheat expected to sell 10,000 contracts each (long 408,000 and short 3,000 respectively), and soybeans are expected to have sold 12,000 contracts (long 124,000). 

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