Markets are higher to start the week with old corn up 2, new corn up 6 and soybeans up 18.
Thursday’s trade was kind of a mess in the spread trades between a whole host of commodities. Post report trade can make some weird things happen as a lot of bets are exited. This is not unusual for big reports, which is why right or wrong they can be very dangerous. It was bullish for all beans, and yet the price for May beans was down 35 Thursday. Today should return to more of a normal trade.
This will be day three of liquidation from the crop report. The market should start to normalize today. China is out of the market on Holiday. We also have a USDA report on Friday of this week.
Archer Daniels Midland said on Thursday it would restart ethanol production at two of its U.S. corn dry mills this year, as the grains trader expects demand for the biofuel to rebound from a pandemic-led slump. The company had last April decided to temporarily idle ethanol production at its facilities in Cedar Rapids, Iowa, and Columbus, Nebraska due to lower gasoline demand. Demand for corn-based ethanol, blended into gasoline, is set to rise as people are expected to start driving more as COVID-19 vaccinations gather pace and as China imports more volumes. While ethanol demand may continue to increase, exports should start to taper off with high prices as the US loses its competitive pricing to other suppliers.
Last Thursday’s stocks report was neutral to bearish while the acres report was bullish the markets. I would not be surprised to see last weeks 91.14 million acres come in north of 93 million when planting wraps up this spring. Early weather has been good and planting is rolling in the south. If good weather holds for the next 60 day’s we will see more corn acres planted.
Have a Safe Day!