Monday, April 12, 2021

The USDA fed the corn bulls again late last week with a favorable ending stocks report, although it didn’t move the market much as a lot of this was already expected. The USDA raised exports by 75 million bushels, corn used for ethanol up 25 million bushels and feed and residual increased 50 million bushels. Global ending stocks were lowered a bit more than the trade was forecasting. Corn ending stocks are pegged at 1.352 million bushels vs 1,919 last year and 2.221 in 2019. South American production was down slightly. Old crop corn on the board is nearing $6.00 with new crop closing in on $5.00, now at contract highs. Weather and China will be the next things to watch. The soybean bulls were disappointed with the USDA putting ending stocks “unchanged” at 120 million bushels. This compares to 525 last year and 909 the year before. Exports were higher but domestic crush was lower. New crop soybeans are at contract highs. Chart watchers are looking at moving averages. December corn is now 20 cents over the 21-day average and 28 cents higher than the 50-day. Soybeans have also moved higher than the moving averages. Fat cattle are $123, just $2 off the high set in mid-February. Good alfalfa is selling at $110 per ton in large rounds, $175 per ton in large square bales. Good grass hay is $95-$100 per ton in large squares. New crop corn at local elevators is $4.68 with soybeans at $11.88. The processors are $4.78 and $12.15. There were some corn and soybeans planted last week, just before rain across most of the state and a drop in temperatures. Soil temperatures dropped to 43 degrees in corn stalks and 44 in soybean stubble after being 50 degrees earlier in the week. We’re still higher than last year and the 10-year average.

 

Monday, April 5, 2021

The USDA gave us a big surprise last week with their quarterly stocks and planting intentions report. The market reacted in a huge way with limit up moves in corn and soybeans from nearby through new crop. Corn stocks came in at 7.701 billion bushels with the trade estimate at 7.767 to 7.952 so within the range. The surprise was in the intended corn acres. The USDA is predicting 91.44 million acres with the trade guess at 93 to 94 million. With this being such a shock, most think the acres will increase and be closer to 93 million by the time we’re done. Nebraska, Iowa and Illinois are all down about 3.0% from last year. The soybean story is very similar with the stocks coming in at 1.564 billion bushels with the trade estimating 1.534 to 2.255 billion, also in the range but closer to the low side. The acres were also a surprise with the trade thinking we will plant over 90 million acres and the USDA predicts just 87.6 million acres of new crop soybeans. Nebraska, Iowa and Illinois were up from last year. If anyone was holding on to old crop bushels, the market just gave you another chance to clean out the bins. Wheat acres were actually higher than the trade guess. This week begins the first full week in April and planters are rolling in parts of the Midwest. The drought map looks very similar to 2012 and worse in parts of Nebraska. Demand is still very good but there could be strains in the US-China relationship. We took out the high from March 9th and have moved 16 cents higher than the 21 day moving average and 26 cents higher than the 50 day. After a year of wearing masks, social distancing and the closure of businesses, it looks like we are turning the tide and getting back to normal. A high percentage of people are getting vaccinated so hopefully this virus will be behind us. New crop corn is over $4.50 at most local elevators with soybeans over $12.00. The processors are $4.70 and $12.35.

 

Monday, March 29, 2021

New crop corn topped out March 3rd and has traded lower, losing 20 cents since. As a chart watcher, corn has moved below the 21 day moving average is only 2 cents higher than the 50 day moving average. Old crop corn has been trading at the upper end of the range between $5.40 and $5.60. We haven’t been this high since July 2013 so there isn’t any reason to be holding old crop at this time. A recent purchase from China didn’t move the market so it seems that a high may be in or tempered by better weather in South America and the potential for more U.S. corn acres this year. A Quarterly stocks report out this week could tell us where we are with the trade estimating 150 to 250 million bushels fewer than last year. Anything less than 7.65 billion bushels would be a win, anything over 7.8 billion would fuel the bears. Coronavirus is still having an effect on the markets as well as severe winter weather, trucking issues and ethanol plant closures. On the soybean side, the news is about the same as corn. Depending on the next stocks report from the USDA, we could see a limit move based on the remaining bushels. The report will also forecast planting intentions with both corn and soybeans expected to show increases over last year. Wheat has dropped over $1.00 per bushel over the past month but there is a lot of bullish news that could turn it around. In other news, a massive cargo ship is stuck in the Suez Canal and delaying shipments in and out of the region. It’s surprising that an event so far from home can have an impact on our markets and supplies of common household products. Mexico is banning GMO corn but this only applies to food-grade corn, corn for livestock is still allowed. Nebraska has been dry since last August and didn’t get much moisture from the snow this winter but a rain in mid-March provided much needed topsoil moisture. We then picked up more rain and are now beginning to replenish subsoil moisture. Warmer temps and no rain predicted this week will have farmers itching to get back into the fields. Planting in Central Nebraska is now less than 2 weeks away. New crop corn prices at local elevators is $4.31 with soybeans at $11.38. ADM in Columbus is $4.49, Green Plains in Central City at $4.39 and soybeans into ADM Lincoln at $11.67.