March 15, 2021
Good Morning,
Markets are mixed this morning with old corn up 3, new corn down 2 and soybeans down 9. Soybean prices appear to be taking a hit with concerns of a larger issue with the African Swine Flu in China.
The forecast for Argentina and Southern Brazil is much wetter than any of the models from last week. A current cold front is going to open Argentina up for rain over the next 10 plus days. One rain system will hang around for the next couple days producing .2-1 inches, followed by another that will bring 1-2 inches later this week. Temps will be below normal as it rains in the South. The weather improvement can help their crop, but is coming a little late to dramatically change production. Brazil Safrinha corn crop is 77% planted, up 20% on the week vs 89% a year ago. Argentina corn is 4% harvested vs 8% a year ago. Brazilian soybeans are 45% harvested, up 12% on the week vs 58% a year ago.
New speculative trade position limits go into effect today for the grains with spot month limits essentially doubling and total positions held allowances increasing substantially. These new limits are going to increase volatility to the up and downside.
Have a Safe Day!
Garry Gard
920-348-6844
March 11, 2021
Good Morning,
Markets are up slightly and trying to regain some of yesterdays losses. Yesterday we saw corn down 11, soybeans down 31 and wheat down wheat down 5.
There were many reasons for the nasty break in futures yesterday in the CBOT. Technical meltdown, trading through several levels of stops. Overbought conditions, without any substantial break in corn futures. A weather model that increased rain totals for Argentina for up to 2.5 inches. African Swine Flu breaking out in new areas of China.
CONAB raised their estimate of the Brazilian soybean crop to 135.1 MMT from 133.8 last month compared to the USDA at 134.0 MMt. They also raised their estimate of total corn production to 108.1 MMT up from 105.5 MMT previously.
Weekly export sales came in on the low end for corn at 15.6 mln. bu. compared to the ten week average of 66.5. Soybeans came in at 12.9 mln. bu. compared to the ten week average of 22.5.
Chinese soybean processors are taking down time for maintenance due to the slow arrival of Brazilian soybeans. Yet, soymeal prices remain soft. It’s not a good sign when soymeal futures in China are down when crushers are taking down time. That suggests soft demand due to a resurgence in African Swine Fever cases.
Have a Safe Day!
Garry Gard
920-348-6844
March 10, 2021
Good Morning,
This morning corn is down 9 and soybeans are down 23. A technical meltdown developed overnight, high prices are going to have big ranges and moves. This is just going to be part of things moving forward. It will probably get even worse with the expanded position limits that go into place next Monday. The drop is blamed on wet weather for Argentina and Southern Brazil, but this could be the beginning of a lower technical trade. Volatility will rule this market all the way to the end.
Not that anyone should have expected much out of the USDA yesterday and most expected very few if any changes. The USDA delivered to the expectations and delivered a dud of a report. They made no changes to US corn, beans or wheat.
U.S. domestic ending stocks were left unchanged from February at 1,502 million bushels versus the average trade estimate of 1,460 million and the range between 1,302 and 1,561 million. No other adjustments were made to any of the supply or demand figures on the domestic balance sheet. The projected average farm price was also left unchanged at $4.30/bushel. World corn ending stocks increased 1.14 MMT from February to 287.67 MMT versus the average trade estimate of 285.3 MMT and the range of estimates between 282 and 287 MMT. Notable changes included a 650,000 MT increase in projected imports for Southeast Asia (SEA) to 18.7 MMT.
Have a Safe Day!
Garry Gard
920-348-6844
March 8, 2021
Good Morning,
Another sharply higher Sunday night trade fades into the early AM hours. Improved rain chances in Argentina and a USDA crop report coming Tuesday have held prices at bay. Look for the market is going to chop around today and tomorrow.
Tomorrow the USDA will release their monthly WASDE report. The trade est. US 2020/21 corn carryout at 1,470 mil bu vs USDA 1,502, soybean at 117 mil bu vs USDA 120, US 2020/21 wheat carryout at 839 mil bu vs USDA 826, World 304.3 mmt vs USDA 304.2. Trade est Brazil soybean crop near 133.1 vs USDA 133, Argentina near 47.4 vs USDA 48, Brazil corn crop near 108.3 vs USDA 109, Argentina near 47 vs USDA 47.5
I would guess the USDA comes out with something very close to what the trade estimates have. They will want to see what the future holds for corn and bean exports, as they have vaporized as of late. Brazil and Argentina crops are unknown, with the majority of harvest yet to develop.
Have a Safe Day!
Garry Gard
920-348-6844
March 4, 2021
Good Morning,
Stronger markets this morning after a weak overnight session. Corn is up 5 and soybeans are up 30.
The 6% drop in the Brazilian currency over the last few trading sessions plus weakening values for corn in Argentina have caused the recent setback in the markets. Traders remain fearful of increased supply from South America and less demand for US corn as Argentina corn prices have shifted below US values.
The trade was expecting weekly corn export sales of 400-800 mt, soybeans 100-500 mt. Actual sales were 115,900 mt of corn, 334,000 mt of beans. Bean sales were split between Mexico, Germany and Japan. China is obviously waiting for Brazilian beans.
The outlook for the next week remains hot and dry for Argentina, which should continue to stress crops going through the reproductive phase of development. Very heavy rains remain in place for much of Brazil, other than Rio Grande do Sul at the far southern tip of the country. However, that pattern is expected to change by mid-month. Rain chances start improving significantly for Argentina after March 12th. This should be able to recover a part of the lost production potential for Argentina’s corn and soybeans.
Have a Safe Day!
Garry Gard
920-348-6844
