Grains are lower in overnight trading:
Corn – ½ cent/bu (May @ 5.46 ¼ )
Soybeans – 6 cents/bu (May @ 13.87)
Chi Wheat – 4 ¾ cents/bu (May @ 6.12)
Cdn $ -0.00160 (79.235 cents)
WTI Crude Oil -1.16/barrel (60.40)
We are seeing follow through selling on commodities in general this morning. Outside markets are feeling anxious, as COVID infection numbers start to spike higher again around the globe, with hospitalization rates also increasing. Despite ongoing vaccinations against the virus, new more transmissible variants are allowing the spread to increase, which is leading governments to enact more lockdowns to prevent such spread. The fear in the market is that such restrictions will curb demand. There is also “fallout” in markets as the downfall of a US investment firm, Archegos Capital reverberates through financial sector. So far the damage has been limited to a few banks that financed the trades of this company (said to be in the 50 billion dollar range), but there is always the fear of a more broadly based sell off.
Traders continue to square positions ahead of tomorrow’s USDA Quarterly Stocks Report and USDA Prospective Plantings Report. Recent stocks reports have thrown some huge surprises at the trade, allowing for big market swings, so some market participants are taking some risk off of the table by reducing long positions in grain futures. March 1st corn stocks are pegged at 7.767 billion bushels, a six year low, while the average trade guess for soybean stocks on March 1st is 1.541 billion bushels, a 5 year low and 35% below the 3 year average. While grain stock numbers are clearly tighter than usual, current grain prices are high, reflecting that tightness.
Average guesses for 2021 corn acres are 93.208 million acres (range of 92.0 to 94.5), while the average guess for soybean acres is 89.996 million acres. The acreage numbers released tomorrow will have a huge impact on price direction going into the 2021 growing season.
The USA Midwest and Plains were dry yesterday, with 5 day precipitation forecasts running dry for the bulk of the area with the exception of the Ohio River Valley. Extended forecasts for the Plains and Midwest are running wetter this morning for both the 6 to 10 and 11 to 15 day windows. Argentina and Brazil were also dry yesterday, with the exception of some fringe crop areas. Most areas are expected to remain dry through the first week of April, which will help accelerate dry down and harvest of crops, but will add stress to the Brazilian safrinha corn crop.
Your Wanstead Farmers Co-operative is EXTREMELY excited to announce the expansion to our Alvinston Branch. The new facilities in Alvinston will increase the previous drying and storage capacity for the members of Wanstead. The expansion includes two 150,000-bushel dry bins, two 45,000-bushel wet bins, and a new high-efficiency grain dryer. These facilities broke ground at the end of March and are expected to be up and running for corn harvest this year. The increased capacity allows Wanstead to continue serving the increased demand for space by its members, as well as position themselves for future growth.