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March 31st- Closing Market Commentary

03/31/2021
March 31st- Closing Market Commentary

Grains closed sky-high today:

Corn + 25 cents/bu (May @ 5.64 1/4) ßLimit Up

Soybeans +70 cents/bu (May @ 14.36 3/4) ßLimit Up

Chi Wheat +16 1/4 cents/bu (May @ 6.18)

Cdn $ +0.00400 (79.57 cents)

WTI Crude Oil -1.39 (59.16/barrel)

Markets are looking good today!!! USDA reports came out and were clearly overwhelmingly positive.

March 1st stocks came in lower for corn, slightly higher than estimates for soybeans, and wheat stocks were  higher than the trade guess. All in all, this is bullish for the old crop market.

All in all, the stocks report was close to expected. The USA corn planted acres for both corn and soybeans are MUCH lower than expectations, while wheat is higher than expectations. The total planted acres was projected at 178.7 million acres, while the trade was expecting at least 182 million acres. Total corn and soybean acres last year were much higher in the 2018/19 year, without any prevent plant acres being included. Now, at wildly high prices, you would think that farmers would be trying to plant everything they had, plus some. How are we losing acres? Overall, these acreage numbers leave next year's balance sheet in a rationing mode. If we do not get good yields, or all these acres in, we could be in a very tight position for the coming year. This report is a huge tone-setter for the markets heading into spring, and it is looking positive!! New crop is THRILLED with these numbers as we will need perfect weather to stay just comfortable in carry-outs for next year.

This are looking great today, but how things trade tomorrow, after the excitement subsides, is really a good indicator of the real market reaction of the report. In fact, although the market traded limit up, the synthetic settles suggest that both corn and soybeans would have gone higher if given the opportunity. May corn’s synthetic settle was 5.77 (+12 ¾ higher than the close), and May soybeans’ synthetic settle was 14.40 ¾ (+4 higher than the close). This may indicate that the market is hoping to move higher tomorrow. That being said, we will also be easing into a three day weekend with the market’s closed on Friday, so we could see some selling off to ease into the weekend.

The EIA Report was also released today, although it was much less significant to grain prices. Commercial crude oil stocks were expected to have decreased 900,000 barrels to 501.8 million barrels, while ethanol stocks also decreased 700,000 barrels to 21.1 million barrels. Ethanol supply increased 43 thousnad barrels per day to 965 thousand barrels per day.

The export sales report will be released tomorrow for the week ending March 25th. Estimates are in thousand tonnes.

Funds are thought to be all buyers today with corn expected to have bought 50,000 contracts (long 396,000), soybeans to have bought 40,000 contracts (long 135,000), and wheat to have bought 15,000 contracts (long 1,000). 

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