February 26, 2021
Good Morning,
Weaker markets to open the day with corn currently down 4 and soybeans down 6. Markets have rebounded from the overnight session that saw corn down 10 and soybeans down 20+.
Many factors added to the selloff in prices yesterday; first notice day liquidation, a model change in weather and weak exports across the whole host of commodities. Any kind of change can cause a purge of the longs. I expect more opportunities moving forward, but the volatility will continue throughout the year.
The South American weather forecast has flip flopped from yesterday’s wet weather in Southern Brazil and Argentina. This is not the first or last time that model has or will do this. Today’s forecast doesn’t matter, other than it is back to bullish. What will matter is if the rain is on for next week this Sunday night. Forecasts are for rain to get moved back a bit and will show up in the 11-15 day period instead. Temps will remain high is Southern Brazil and Argentina until there is a break down of the ridge.
Us weather looks favorable for crops. Kansas City Based World Weather Inc released the following information yesterday.
“Temperatures will be trending unusually warm across much of the U.S. Plains and into Canada’s Prairies during the first week of March. Temperature anomalies will become above to, in some areas, well above average. The warmth will reduce snowpack and raise soil temperatures bringing more wheat in the southern Plains, Delta and southeastern states out of dormancy and help lift soil temperatures enough in the southern states to support some spring planting and germination. Cooling is a possibility after the first week of March; though, there is uncertainty as to how much cooling occurs and exactly what areas will be impacted.”
Have a Safe Day!
Garry Gard
February 25, 2021
Good Morning,
Markets are down hard this morning with contract roll and much better weather in South America.
Today is the roll day for March futures, all long positions need to be move or else face delivery. The market is putting the squeeze on anyone that was holding a long position in the March futures. Anyone holding a long position at the close of trade today will be forced to deliver.
U.S. Ethanol production for the week ended Feb 19 totaled 658,000 bls per day (down 27.8% vs a week ago, down 37.6% vs a year ago); Stocks were 22.8 mil bls (down 6.2% vs a week ago, down 7.8% vs a year ago); Corn use 66.5 mil bu vs 92.0 mil last week and 95.7 mil needed to meet USDA projections. Cold weather has hampered plants the last couple weeks and slowed consumer driving. Many plants reduced production greatly due to the cold weather and natural gas issues.
***A very significant change in the weather for Southern Brazil and Argentina.***
The current forecast for Southern Brazil and Argentina has little rain, but moving out 5-7 days has a major storm coming in on a breakdown of the ridge. The Ridge is going to move North putting drier weather where Brazil needs it most. The forecast could prove to be a bust, but this is the map for now, and we have to respect significant changes in the weather. This forecast has 2 inches of rain coming when Argentina needs it most.
If you haven’t sold much new crop corn, today may be the day to do it. I am not expecting this market to continue the selloff, but we could hit some technical triggers that move this market lower. Heading into the March 31st planting intentions I would suggest being 50%+ sold on new crop corn. I expect 93-94 million corn acres on that report which could push markets lower. This is “IF” we have a favorable spring for planting. If weather is good, we could easily see 94-96 million acres.
Have a Safe Day!
Garry Gard
920-348-6844
February 23, 2021
Good Morning,
Stronger markets to open the day with corn up 6 and soybeans up 30. Soybeans are leading the way with interest in South American weather on traders minds today.
The USDA rated the Kansas winter wheat crop at 40% good to excellent down from 43% . Last year the Kansas crop was rated at 35% good to excellent. The expectations were for a larger drop this week after the bitter cold of last week.
Brazilian harvest is near 15% complete vs 31% average. Brazil’s second crop corn plantings are 15% vs 50% last year. Wet weather is going to keep the harvest pace slow, and new plantings will be late. The forecast holds the same wet weather in the North over the next 10 days with up 8 inches projected, its rain just about every other day. The forecast below has some light rain for Southern Central Brazil and trace amounts for Northern Argentina. Eastern Brazil is going to see moderate to heavy rain in the next week. The forecast is still bullish this morning following almost exactly the same pattern of the past month plus.
Have a Safe Day!
Garry Gard
920-348-6844
February 22, 2021
Good Morning,
Corn is up 5, wheat is up 9 and soybeans are unchanged to open the week.
Funds are long 344,000 corn and 154,000 beans after Fridays close. Look for the markets to have a high level of volatility in the next 28 trading days as we work towards the planting intentions on March 31st.
The forecast for Brazil is for heavy rains to continue in the North. Weekend totals were up to 2.5 inches. Northern Brazil is expected to get as much as 8 inches in the coming week. Southern Brazil and Argentina have drought conditions in the 10 day and 15 day forecast. Little to no rain is forecast for the 5th or 6th week in a row. Temps will also be on the rise in Southern Brazil and Argentina, pushing into the upper 90s. The weather forecast is bullish with too much rain in the North and poor rain totals and rising temps in the South.
South American weather is bullish and could produce a higher trade. First notice day is Thursday, so that may have as much impact as anything else. The Fund roll looks to be going out into new crop beans on the long side as well. Sunday night have rallied, followed by a more subdued trade by Monday morning. This is a trend that has been going on for the better part of a month. The market looks to be stuck in a holding pattern for now.
Have a Safe Day!
Garry Gard
920-348-6844
February 19, 2021
Good Morning,
Corn is unchanged to three higher depending on contract month while soybeans are up three to five this morning.
This weeks AG Forum did little that wasn’t expected with acres and carryout for 2021. They projected soybean acres at 90 million and corn at 92 million. Carryout was pegged at 1.552 billion bu. for corn while soybeans came in at 145 million. Production for corn came in 7% higher than 2020 based on an increase in acres and yield.
Typically this report does not influence trade as it is just a government projection with no producer surveys to back it up unlike the March 31st planting intentions.
Look for trade to continue to be volatile heading into spring planting as weather this spring could set the markets tone for the next 12 months.
Producers, Traders and speculators that are long corn and soybeans should keep in mind that these recent high prices are doing their job of quelling demand.
- Ethanol plants that have been down are not starting back
- Ethanol plants that have been running are slowing down due to economics and recent weather issues.
- Livestock producers are converting to alternative/cheaper sources.
- South America is starting harvest and begining to export soybeans and corn that will compete reduce US demand in the coming months.
Have a Safe Day!
Garry Gard
920-348-6844
