April 26, 2021
Good Morning,
Markets opened up limit in corn this morning and 30 higher in soybeans. They have since fallen off those levels but are still very bullish.
The 10 day forecast for Brazil is dry! There is almost no chance for rain of any sort in the Southern half of all Brazil. The dry corn area is getting smoked. The limited rainfall is said to be reducing the crop by at least 20% and would come directly out of exports. The winter crop would be 68-70 mmt and exports would drop to 9-12 mmt. The total crop in Brazil will be lower than 100 mmt. Argentina is likely to raise export taxes as well to slow inflation and bring in more revenue. It already slaps a 33% tax on international soybean exports; 31% on soymeal and soyoil; and 12% on corn and wheat. This is the reason for the sharp rally in July corn futures.
The trade is expecting 18-20% of the corn planted vs the 5 year average of 20%. Spring wheat plantings are expected to be 28-30% vs 24% average and 7-9% of the beans should be planted vs 5% average.
The 10 day forecast for US weather has a fair amount of rain from the Central Grain belt and South. The Northwestern grain belt will see light chances, with the drought holding in place. Temps will really warm up this week hitting 80 degrees locally tomorrow. Temps will be mostly normal for the 10 and 15 day run.
Have a Safe Day!
Garry Gard
920-348-6844
ggard@didionmilling.com
April 23, 2021
Good Morning,
Markets taking a breather this morning after a wild week of higher trade. Corn is currently down 4 and soybeans are down 7.
Prior to todays pause the markets gained 60 cents in old crop and 40 in new crop. South American weather concerns along with cooler temps early in the week for the US gave the funds the fuel needed to continue the climb. After yesterdays close, the funds are reported to be long a record 540,000 corn futures. They are also long 212,000 soybean and 59,000 wheat contracts. They have added 130,000 contracts to their corn position this week. While this has led to some great opportunities for anyone long corn, it does cause concern in my mind. At some point these firms will want to take profits and trying to guess when and what will trigger the selloff of their positions is impossible. My advice is for producers to continue to make sales (corn, soybeans, wheat) on the way up and not look to hit a homerun on everything.
Daily price limits for Chicago Board of Trade grain and soy futures will expand in May following a routine half-yearly review, CME Group Inc, parent of the exchange, said on Thursday. The new limits go into effect on May 2, for trades dated May 3, CME Group said, potentially increasing volatility. The wider daily limits follow the exchange operator’s move on March 15 to expand speculative position limits, raising the number of CBOT futures contracts that non-commercial traders can hold. The daily limit for corn would increase from its typical $0.25/bushel to $0.40/bushel for today’s trading session.
CBOT also announced corn futures maintenance margins would increase by $200 to $1,700 for May 2021. Similarly, margin requirements for soybean trades will increase by $475 per contract to $3,825. The Minneapolis Grain Exchange also announced yesterday afternoon it would raise its maintenance margin on spring wheat contracts by $500 to $1,900 per contract for May and July 2021 futures.
The Biden administration hopes to convince farmers to set aside four million more of acres of land for conservation this year by raising payment rates in an environmental program, but farmers said surging crop prices make it a tougher sell. The push to enroll more land into the 36-year-old Conservation Reserve Program is a part of the administration’s campaign to counter climate change.
Have a Safe Day!
Garry Gard
920-348-6844
April 20, 2021
Good Morning,
The climb continues this morning with corn up 12 in the old crop and 8 in the new crop. Soybeans are leading the way trading 30 higher.
Yesterday afternoons planting progress report showed U.S. Corn planted was 8% versus 4% a week ago, 6% last year, and 8% average. IL 12 vs 7, IA 4 vs 2, KY 26 vs 23. U.S. Corn emerged was 2% versus 1% last year, and 1% average. U.S. Soybeans planted was 3% versus 2% last year, and 2% average.
The 10 day outlook for South America is mostly the same as yesterday. Wet weather in the far West and dryness in Central and Eastern Brazil. Temps will be the same 80’s-90’s, which is about normal. The dry weather pattern is still in place and is going to further deteriorate second crop Brazilian corn. Brazil is going to allow for duty free imports of corn, soyoil and meal.
The December corn market is starting to get very overbought from a technical standpoint. We have two major gaps below the market as well. There will be some sort of correction coming in this market sometime, but for now it rolls on higher. Producers should make some new crop sales at current levels for fall delivery with prices in the $5 range.
Have a Safe Day!
Garry Gard
920-348-6844
April 19, 2021
Good Morning,
Markets are stronger this morning with corn up 6 and soybeans up 9.
The three factors supporting the markets today are a weaker US dollar, dry weather in Brazil for the Safrinha crop and cold US temps to start the week.
The 10 day forecast has no rain in it for second crop Brazilian corn. This is the dry season for Brazil; it just seems that this year the extremes have been greater than usual. No rain for the next 10 days is going to pull yields lower. Brazilian corn is right ahead of pollination. Temps will be in the 80’s-90’s.
Expectations for this afternoon’s corn planting progress are expected to be 10-11% vs. 8% for the 5 year average. The first soybean planting progress update is expected this afternoon as well.
Friday’s report showed the funds adding 15,400 contracts to their net long position in corn. They are currently estimated to be long 402,000 contracts which is the largest net long since January of 2011 and nearing the all-time record long of 429,000 contracts.
I would advise producers to get firm offers in for old crop corn in the $5.90-$6.00 range and new crop offers in between 5.00-$5.15 range. While the market has been slowly climbing higher, we need to keep in mind that the funds are running the market right now and at some point they will start to dump these longs and send the market into a quick tailspin. We have a gap in December corn to fill between $4.775 and 4.8076 that I would expect to see filled in the coming weeks.
Have a Safe Day!
Garry Gard
920-348-6844
April 15, 2021
Good Morning,
Old corn is down 3, new corn is unchanged and soybeans are up 4 to start the day.
Exports were very low this week without much interest in any of the core US products. Corn sales were 327,700 mt with almost all the sales coming from 50/50 with Japan and Mexico. Bean sales were 90,400 mt with a host of traditional buyers in, but zero for China. China did buy some new beans with 265,000 mt.
For the week ended Apr 9th, ethanol production was 941,000 barrels per day, down 3.5% versus a week ago, up 65.1% versus a year ago. Stocks were 20.5 mil barrels, down 0.6% versus last week, down 25.3% versus last year. Corn used was 95.1 mil bu versus 98.5 mil last week and versus the 97.2 mil needed to meet USDA projections.
The 10 day forecast in Brazil has some rain showing up next week in the South, 1-2 inches in isolated storms. Central Brazil will stay mostly dry with close to trace amounts forecast. This could be the beginning of a pattern change, with some of the first rains moving into Southern Brazil.
May corn futures touched 6 dollars in the overnight trade. Whatever happens today, is probably going to be the high for this. After the drop on Monday, the market has rallied about 40 cents in corn for the week. Beans are in the middle of their trading range that they have been holding since January. The funds continue to stay long. The bean position is on the small side with South America taking over exports and the risk of African Swine Flu holding that trade back. Corn futures are going to result in some new acres getting planted as new crop prices have rallied above 5 dollars.
Things are good for now and the markets should remain stable, but be prepared as any shift in demand and this thing will head south fast.
High Prices cure High Prices!
Have a safe day!
Garry Gard
920-348-6844
