Weather N/A
Futures

April 7th- Closing Market Commentary

04/07/2021
April 7th- Closing Market Commentary

Grains are mixed to close:

Corn + 6 1/4 cents/bu (May @ 5.60 1/2)

Soybeans – 10 cents/bu (May @ 14.08 3/4)

Chi Wheat + 3/4 cents/bu (May @ 6.16 1/4)

Cdn $ -0.00295 (79.215 cents)

WTI Crude Oil +0.44/barrel (59.77)

Grains closed mixed amid conflicting bearish and bullish news stories.

Big difference between the daily high and the daily low for soybeans. As one of the least volatile days we have seen in a while, the futures difference in just one trading session are still wide.

Soybeans are lower amid a massive export number out of Brazil for the month of March. The 14.9 million mt of exports is higher than 2020, 2019, and the 5-year average.

Agribusiness consultancy Agroconsult reported Brazilian farmers will harvest an estimated 137.1 MMT of soybeans. This would be a record volume, and is unexpected because of the weather-related challenges the country has faced. In contrast, it is reported that some co-ops in Paraná talking about 28% reduction in soybean yields. Who is correct? Private analyst are also starting to cut back Brazil’s corn crop size on lack of moisture and late planting.

The USDA report out Friday and the market is looking for them to adjust ending stocks of corn and soybeans lower (by increasing exports). Whether this is already priced into the markets, and whether the change does occur are two unanswered questions. Only time will tell….

The EIA report was released this morning and showed commercial crude oil stocks down 3.5 million barrels to 498.3 million barrels. Ethanol stocks were also down 500,000 barrels to 20.6 million barrels. Ethanol production is up 10 thousand barrels a day to 975 thousand barrels a day, and ethanol production used an estimated 95.6 million bushels of corn last week.Arlan Suderman, Chief Economist at StoneX noted that, “Marketing year to date corn use for ethanol is estimated to be 2.887 billion bushels, down 7.6% from the previous year's pace and down 41 million bushels from the seasonal pace needed to hit USDA's target for the year. Corn usage is back to the weekly seasonal pace, but it now needs to make up for all the lost production during the February cold wave to reach USDA's target for the year”.

For the month of February, it was reported that the USA exported 6.3 million tonnes (248 million bushels) of corn. This beats the February record from 2008 of 5.4 million mt. This is 59% higher than the 5 year February average, and only 18% of the exports went to China. Soybean exports for the month were pegged at 4.56 million mt (168 million bushels). This is 5% higher than the 5 year February average, and 30% of the shipments were headed to China. This amounts to 1.39 million mt (51 million bu) of soybeans to China in February, the second lowest for the month since 2004. These numbers actually reflect a record February volume that went to non-China buyers.

The export sales report is due to be released tomorrow morning. Estimates are below in thousand tonnes.

Estimates

Last Week

Last Year

Corn 2020/21

Corn 2021/22

500-900

50-300

797.3

60.0

1848.9

608.8

Soybeans 2020/21

Soybeans 2021/22

100-400

0-200

105.8

131.0

523.5

353.4

Wheat 2020/21

Wheat 2021/22

100-500

50-200

250.1

81.0

258.6

117.4

Funds are expected to be mixed with corn projected to have bought 8,000 contracts (long 417,000), soybeans to have sold 5,000 contracts (long 160,000), and wheat to have bought 1,000 contracts (short 5,000). 

Our first edition of the agronomy weekly emails were sent off today! Here is a link to this week’s issue https://conta.cc/31SRoBR There is a subscribe button at the top if you are interested in joining the list!

Your choice regarding cookies on this site:

We use cookies to optimize site functionality and give you the best possible experience.
Privacy Policy

Your choice regarding cookies on this site:

We use cookies to optimize site functionality and give you the best possible experience.
Privacy Policy