March 26, 2021
Good Morning,
Markets are mixed this am with corn up 1 and soybeans down 1.
Most of what is going on here is end of month, end of quarter and pre-positioning for the US crop report next Tuesday. The Funds did clear out a sizable amount of position dropping 50,000 corn over the last 10 days. The bean position was reduced by close to 35,000 contracts pre-report. Soyoil which had made new highs this week gave it up in limit down fashion with the funds selling out 12,000 contracts yesterday. The meal market has made net gains on the week as Funds liquidated out some of the bear leg of their trade. The positions have dropped, but open interest for the week has hardly changed.
The weather in the US is going to clear out over then next 10 days. Rain moves off into the East, leaving most of the middle of the US open. Temps are going to warm up and be above normal over the same time. We will probably see some planting late next week for some early season beans.
USDA March report: Trade estimates for corn stocks 7,767 vs 7,952 ly, soy 1,543 vs 2,255, wheat 1,278 vs 1,415. Trade estimates for US 2021 corn acres near 93.2 mil vs 90.8 ly, soy 90.0 vs 83.1, all wheat 45.0 vs 44.3. We will have more talk about the crop report estimates next Monday and Tuesday.
Have a Safe Day!
Garry Gard
920-348-6844
March 25, 2021
Good Morning,
Softer markets this morning with corn opening 6 lower, soybeans 15 lower and wheat down 12.
Crude oil continues to drop and has been trading sub $60/barrel for the last few days. Covid outbreaks in Europe and the blockage of the Suez Canal have the crude oil market headed lower, which is not good for corn prices. As I mentioned in yesterday’s comments it was crude that led the charge lower a year ago. Will it be the leader again this year?
Farm Futures magazine indicated that producers expect to plant 93.6 mil acres of corn in 2021, up 3 pct from the 90.8 mil acres seeded a year ago. Soybean plantings for 2021 were forecast at 88.5 mil acres, up 6 pct from the USDA 2020 estimate of 83.1 million acres. Total wheat plantings were seen at 45.6 mil acres, up 2.8 pct year-on-year.
Export sales this week were 343,600 wheat, 4,481,900 mt of corn with China buying 3,890,600 mt, and 101,800 mt of beans. China bought no beans this week, moving the import program to South America.
Central and Eastern Brazil have no rain in the forecast for the next 10 days. The 11-15 day holds the the same hot dry pattern as a high pressure ridge has set up for the past 2 weeks. Rains are being driven south into Southern Brazil, but mostly Argentina. Harvest is already under way in Argentina and will pick up speed in April. Brazilian harvest will be aided by the dry weather, while the second crop corn is going to have moderate stress. As long as there are timely rains, this is less of an issue for Brazilian corn.
I don’t see the market rallying or breaking very far until the March 31st report next week. ASF in China makes traders unwilling to take on new positions, questioning if the disease is worse than reported (it probably is, just under better control). Funds positions are still mostly the same as a month ago and open interest hardly changes on a daily basis. That will not be the case next Tuesday as we have one of the more dangerous reports of the year. This looks like a day when nothing good happens, so I guess we’ll see if it can hold together again.
Whether you are a seller or buyer of grains, I would strongly recommend having 70%+ of your old crop business done and 50%+ of your new crop business done. No one can predict what next weeks report will give us or where the markets will head in the coming months but taking risk off the table is the safest way to remain in business.
Have a Safe Day!
Garry Gard
920-348-6844
March 24, 2021
Good Morning,
Corn markets is unchanged and soybeans are up 5 to start the day.
Crude oil is off sharply which and had some traders very nervous that we may see a selloff in other commodities.
Last Spring when Covid shut down the World economy, it all started with crude oil and US stocks. Crude oil closed terrible yesterday, and we are not sure how other markets will follow.
The Chinese stock market has also followed the path of crude oil, as it has wasted bullish traders over the last few weeks. This is another thing that had us worried yesterday, watching other markets come apart and especially this one.
US weather is going to be wet into April 3rd. Drought conditions in the central US will ease a little more each day. The Southern planting region is going to see delays with some areas getting heavy rain in the next week. The Western region up into the Dakotas still has no chances of rain in the next week.
Planted acres will be a record large combined for corn and beans in next weeks report. We could see corn acres at 96+ on the report which would set this market back significantly. Make sure you have sales on and offers in place prior to the report. $5.50 old crop corn and $4.50 new crop corn are very profitable and should be captured.
Have a Safe Day!
Garry Gard
920-348-6844
March 23, 2021
Good Morning,
Corn planting across the south is accelerating with Texas now 38% complete vs. 34% on the 5 year average while Louisiana is 52% planted vs 30% on average and Mississippi is 11% complete vs. 3% average. Hopefully the early planting progress rolls into the northern states in the coming months with the warmer temperatures that we have been seeing. Private analyst IEG Vantage (formerly Informa) released their estimates for US corn plantings at 94.3 million acres compared to the USDA February Outlook expectation of 92.0 million. They estimated soybeans at 89.7 million compared to the USDA’s Feb estimate of 90.0. We will see several more estimates coming this week.
Brazilian soybean harvest has nearly caught up with 60% now complete compared to 63% on average for this week. Mato Grosso is 92% harvested compared to 94% average. The safrinha corn crop is nearing 86% planted compared to 95% on average.
Corn is unchanged and soybeans are 10 higher to start the day.
Be sure to get sales on and firm offers in place before next Wednesday’s report!
Have a Safe Day!
Garry Gard
920-348-6844
March 22, 2021
Good Morning,
Markets are down sharp to start the week with corn off 8 and soybeans off 7.
Favorable weather continues to be the case in South America. Fronts are bringing rain to previously parched areas of Argentina. The forecast is consistent with where we left things off on Friday. A total flip to a wet pattern in Southern Brazil and Argentina, while North and East Brazil will be very dry. Argentina saw totals last week of over 2 inches and look to get another 2-5 inches this week. A high pressure ridge has set in Brazil that is keep the rain out for the next 10 days. There are also some indications that we could see a flow of moisture return to Brazil for the safrinha corn areas which would be beneficial to the crop.
Private survey based planting intention estimates should start to come out this week and will provide info for the markets to trade. Next Wednesday 3/31 is when the USDA will release planting intentions.
I would advise producers to have 40-50% of their new crop sold prior to this report to protect against any bearish numbers. If the USDA gives us 93+ million acres of corn, this market could sell off in the new crop.
Have a Safe Day!
Garry Gard
920-348-6844
