Grains are mixed in overnight trading:
Corn unchanged (May @ 5.51 ¼ )
Soybeans + 5 cents/bu (May @ 14.28 ¼ )
Chi Wheat – 4 ½ cents/bu (May @ 6.30 ¼ )
Cdn $ -0.00020 (79.545 cents)
WTI Crude Oil +1.29/barrel (59.05)
Grains have traded both sides of unchanged again overnight, in relatively narrow trading ranges (corn 4 cents/bu, soybeans 14 ¼ cents/bu, and Chicago wheat 9 ¼ cents/bu). Grain futures continue to be supported by ideas of shrinking USA grain stocks of old crop corn and soybeans, while spring rains in the USA Plains and Midwest and South America temper any bullish enthusiasm.
Soybean values are being supported by private estimates that indicate new crop USA bean acres of slightly less than 90 million, as well as very strong global vegetable oil prices. The USA cannot afford to lose bean acres this spring, which should keep the soy complex well supported right into the March 31st USDA Prospective Seeded Acreage report.
Yesterday saw good rains in the USA northern Midwest, with heavy precipitation expected for the eastern Corn Belt starting tomorrow. Argentina was dry yesterday, but should see widespread rains through the weekend. Brazil was mostly dry yesterday as well, with some chances for rains in it’s southern geographies. Forecasts for both Brazil and Argentina are running drier for next week.
Locally, we continue to see local ethanol producers ramp up their production (coinciding with big increases in USA ethanol production). Ethanol buyers have good nearby coverage, but bids are starting to strengthen for summer delivery windows. Crushers are also strong bidders for any old crop bean supplies, so those basis bids should remain strong as well.
In commodity news, the world watches anxiously as one of the largest container ships in the world ran aground in the Suez Canal yesterday, bringing shipping in both directions to a complete standstill. The “Ever Given”, a 400 metre long container ship apparently lost it’s ability to steer in high winds and a dust storm, and ran aground, effectively blocking the Canal. The Suez Canal is the busiest shipping route on the planet, and despite 8 tugboats being on scene trying to remedy the situation, analysts are suggesting it could be days before shipping resumes to normal, and the backlog of vessels is cleared. It is concerns over disruptions to the nearby shipment of crude oil from the Middle East that has allowed crude oil futures to bounce this morning, after yesterday’s steep losses due to concerns over new European COVID lockdowns.