Plus: a assessment of Friday’s WASDE report
- Corn up 1-2 cents
- Soybeans down 8-9 cent, soyoil down $0.77/lb, soymeal blended
- Wheat down 3-9 cents
*Costs as of 6:50 am CDT.
Chicago futures flirted with eight-year highs this morning, rising $0.01-$0.03/bushel on demand restoration and tightening provides. A weaker greenback and better vitality costs additionally underpinned features within the corn advanced this morning.
USDA releases its up to date Crop Progress report immediately. Anticipate a little bit of an uneven week of progress experiences for the early season information. Rain showers within the Higher Midwest final week and thru the weekend slowed planting paces. However the place the rain cleared rapidly, harvest paces sky rocketed.
With the report solely being the second of the crop yr, it will likely be laborious to make many concrete assumptions from this week’s report. Spring wheat planting progress within the Northern Plains stays closely watched as parched soils elevate yield issues. However on the very least, this week’s report will present extra insights as to if or no more corn and/or soybean acres will likely be planted in 2021.
Eye-popping export volumes over the previous month didn’t go unnoticed by USDA in Friday’s monthly World Agricultural Supply and Demand Estimates (WASDE) report. U.S. corn exports have been raised 75 million bushels to 2.675 billion bushels – a brand new document excessive – in Friday’s report back to mirror surging livestock demand from Southeast Asian international locations, led primarily by China.
Advertising and marketing year-to-date corn shipments to the following 5 largest U.S. consumers after China (Mexico, Japan, Columbia, South Korea, and Taiwan) are up practically 25% from the identical interval in 2019/20. Southeast Asian international locations are driving the biggest will increase, particularly South Korea (290% enhance), Japan (31%), and Taiwan (188%).
A yr after the ethanol business collapsed amid pandemic-driven lockdowns, new indicators of restoration point out the sector is able to return to pre-pandemic output ranges. As Complete Farm Advertising and marketing’s Naomi Blohm factors out in a current Ag Advertising and marketing IQ column, “Corn used in last week’s production was estimated to be near 98.5 million bushels, ahead of the 96 million bushels needed each week to keep corn use for ethanol in line with the USDA projection of 4.95 billion bushels.”
Plus, a pair of Heartland-based ADM ethanol crops idled on the top of the pandemic are prone to restart manufacturing within the subsequent week. USDA confirmed a bullish restoration, elevating 2020/21 corn utilization charges for ethanol 25 million bushels to 4.975 billion bushels.
The additional demand from finish customers might work in Midwestern farmers’ favor this yr. For farmers nonetheless figuring out last-minute crop rotations, the added demand will increase the worth of value choices processors are keen to pay to supply corn. An ethanol restoration might sway some acres away from soybeans in areas of the Corn Belt shut to those crops.
USDA additionally elevated corn’s feed and residual utilization estimate by 50 million bushels to five.7 billion bushels for 2020/21. However this revision shouldn’t be precisely straight ahead. USDA-NASS discovered an additional 27 million bushels of corn had been used between September 1, 2020 and December 1, 2020 in final week’s Quarterly Grain Shares report.
A part of Friday’s 50-million-bushel addition is accounted for by that 27-million-bushel Quarterly Shares revision, however it additionally consists of an uptick for livestock consumption. Pasture situations within the U.S. West and Plains, the place over 40% of U.S. cattle manufacturing is sourced, proceed to say no amid drought situations within the area, forcing farmers to shell out cash for high-priced corn of their rations. Meat demand continues to rise, particularly with grilling season on the horizon, so anticipate livestock producers to stay extra reliant on buying feed for the quick run.
USDA minimize 20 million bushels from 2020/21 Argentine corn manufacturing to 1.850 billion bushels as drought continues to degrade crop situations as a consequence of La Niña climate patterns. The smaller manufacturing estimate from the world’s third largest corn exporter, rising world feed demand, and cuts to U.S. shares despatched world shares 150 million bushels decrease to 11.175 billion bushels.
Soybean costs fell $0.06-$0.09/bushel this morning on enhancing prospects for the South American crop. Soymeal costs inched greater as three processing crops in Iowa reopened after upkeep shutdowns idled manufacturing within the area.
USDA largely left U.S. soybean shares unchanged in Friday’s report, although some steadiness sheet changes have been made to mirror revisions to December 1, 2020 soybean shares and further Chinese language export demand throughout Brazil’s delivery delays.
A few of the first indicators of demand rationing have been urged after USDA shaved 10 million bushels from 2020/21 crushing estimates. The present advertising and marketing yr’s crush quantity stays at a document excessive of two.19 billion bushels. However tightening margins for livestock and poultry feeders, in addition to lingering uncertainty within the provide chain amid the pandemic restoration, might cut back feed demand going ahead. The push for biodiesel stays sizzling, although dwindling shares might restrict the sector’s short-term progress.
Favorable crop situations in Brazil’s Rio Grande do Sul and higher than anticipated harvest information from Mato Grosso led USDA to lift its estimates on Brazil’s 2020/21 soybean crop by 74 million bushels to 4.997 billion bushels – a brand new document excessive for Brazilian soybean manufacturing.
Brazil’s export forecast additionally rose 37 million bushels to three.160 billion bushels for the 2020/21 delivery season, which is prone to ease strain on U.S. provides later this summer season. Previous crop soybean futures traded $0.05-$0.08/bushel decrease ultimately look on the information.
Chinese language soy crush estimates have been additionally minimize by USDA to the tune of 73 million bushels. The brand new 2020/21 Chinese language crush quantity of three.527 billion bushels displays ongoing availability points with Brazilian soybean exports, which have been delayed after extreme rains slowed harvest paces. Excessive soy costs and scarce provides have led many Chinese language crush amenities to idle till the Brazilian crop arrives on Chinese language shores.
The delays might favor the recovering Chinese language hog herd, which has been affected by outbreaks of African swine fever (ASF) and different winter ailments due largely to defective vaccines. The herd was anticipated to return to pre-ASF volumes by June of this yr. However the resurgent virus is prone to dampen restoration paces, which might ease strain on Chinese language soy processors particularly as wheat is more and more added to rations.
Forecasts for a bigger Russian crop weighed closely on the wheat market this morning. Russian agricultural consultancy Sovecon raised its forecast on the 2021/22 Russian wheat crop practically 2% greater than earlier estimates to 2.964 billion bushels as climate situations proceed to help a bumper crop within the area.
A weaker greenback helped cap losses. Precipitation forecast within the Northern Plains within the coming days despatched Minneapolis futures down $0.08-$0.09/bushel.
Wheat acres within the U.S. jumped up in 2021, largely as a consequence of a heavy enhance in winter wheat acres planted final fall. However what does that imply for U.S. wheat costs? The decrease spring wheat acreage has spurred a sizeable rally for Minneapolis spring wheat futures over the past week because the contract rose practically 10%. I break down the basics of the bullish wheat market within the newest Wheat Outlook.
USDA decreased each import projections and feed and residual targets for U.S. wheat in Friday’s report, widening wheat shares by 15 million bushels to 851 million bushels. The feed and residual adjustment is basically a perform of December 1, 2020 quarterly grain shares revisions, which have been made after off-farm and industrial storage amenities submitted late experiences to NASS.
Wheat costs noticed one other bullish run after USDA launched up to date information. Going into the report, the expectation of excessive new crop provides largely capped pre-report features, particularly as forecasts favor bumper winter wheat crops within the European Union, Ukraine, and Russia this summer season.
However a 135-million-bushel enhance to world feed consumption, coupled with a 53-million-bushel enhance in world meals utilization, despatched world 2020/21 wheat shares down 208 million bushels to 10.857 billion bushels. Provides are prone to stay enough by way of the 2021/22 delivery season regardless of the tightened starting shares estimate.
Elevated Chinese language demand for wheat, which is a less expensive feed different for livestock producers, additionally paved the best way for futures value features for the wheat advanced this morning. China’s 2020/21 ending wheat shares are anticipated to fall for the primary time since 2012/13 on elevated 2020/21 feed demand, which USDA grew by 184 million bushels in Friday’s report back to 1.470 billion bushels.
Within the quick run, the U.S. will probably be a major world supply for wheat, particularly as Chinese language demand soars and Russia’s steep wheat export tax limits worldwide grain flows.
The drought-plagued Northern Plains will see some moisture reduction this week, based on NOAA’s short-range forecasts. Rain and snow will transfer throughout the Dakotas and into the Northern Nice Lakes area over the following couple days.
However will or not it’s sufficient to replenish soil moisture ranges? NOAA estimates peg 24-hour moisture within the area at half an inch. However extra precipitation may very well be on the best way. A winter storm system constructing within the Central Rockies will start to push east early Wednesday morning and will present a lift to soil moisture ranges within the parched Plains.
Coronavirus instances within the U.S. rose to 31,198,055 instances as of this morning based on the Johns Hopkins Coronavirus Resource Center. The demise toll elevated to 562,066 deaths as of press time.
Inventory futures drifted decrease this morning, with the S&P 500 backing down off Friday’s document excessive shut. Revenue-taking gave the impression to be the secret in in a single day buying and selling as traders eagerly await contemporary financial information this week. Power costs moved greater as markets anticipate world provide and demand forecasts to be launched from OPEC tomorrow. S&P 500 futures traded 0.13% decrease to $4,114.25 ultimately look.
|Morning Ag Commodity Costs – 4/12/2021|
|Contract||Models||Excessive||Low||Final||Internet Change||% Change|
|MAY ’21 CORN||$ / BSH||5.86||5.7725||5.79||0.0175||0.30%|
|JUL ’21 CORN||$ / BSH||5.7125||5.63||5.645||0.0175||0.31%|
|SEP ’21 CORN||$ / BSH||5.1575||5.105||5.12||0.0125||0.24%|
|DEC ’21 CORN||$ / BSH||5.0175||4.965||4.985||0.02||0.40%|
|MAR ’22 CORN||$ / BSH||5.085||5.04||5.0625||0.0275||0.55%|
|MAY ’22 CORN||$ / BSH||5.1175||5.0875||5.095||0.015||0.30%|
|JUL ’22 CORN||$ / BSH||5.1325||5.0975||5.12||0.0225||0.44%|
|MAY ’21 SOYBEANS||$ / BSH||14.0725||13.9225||13.96||-0.07||-0.50%|
|JUL ’21 SOYBEANS||$ / BSH||14.0175||13.865||13.9||-0.0825||-0.59%|
|AUG ’21 SOYBEANS||$ / BSH||13.6575||13.5175||13.535||-0.085||-0.62%|
|SEP ’21 SOYBEANS||$ / BSH||12.95||12.8225||12.8325||-0.09||-0.70%|
|NOV ’21 SOYBEANS||$ / BSH||12.6775||12.5475||12.565||-0.0675||-0.53%|
|JAN ’22 SOYBEANS||$ / BSH||12.66||12.535||12.55||-0.07||-0.55%|
|MAR ’22 SOYBEANS||$ / BSH||12.3625||12.27||12.2775||-0.0725||-0.59%|
|MAY ’22 SOYBEANS||$ / BSH||12.2925||12.2225||12.2225||-0.0725||-0.59%|
|JUL ’22 SOYBEANS||$ / BSH||12.2775||12.22||12.225||-0.0675||-0.55%|
|MAY ’21 SOYBEAN OIL||$ / LB||52.8||52||52.11||-0.74||-1.40%|
|JUL ’21 SOYBEAN OIL||$ / LB||50.9||50.03||50.13||-0.8||-1.57%|
|MAY ’21 SOY MEAL||$ / TON||403.4||400.6||401.9||0.7||0.17%|
|JUL ’21 SOY MEAL||$ / TON||407.8||405||406.2||0.7||0.17%|
|AUG ’21 SOY MEAL||$ / TON||404||402||403||0.8||0.20%|
|SEP ’21 SOY MEAL||$ / TON||398.9||396.9||397.7||0.5||0.13%|
|OCT ’21 SOY MEAL||$ / TON||393.4||391.2||392.5||0.9||0.23%|
|MAY ’21 Chicago SRW||$ / BSH||6.39||6.3||6.3325||-0.055||-0.86%|
|JUL ’21 Chicago SRW||$ / BSH||6.4025||6.3125||6.355||-0.05||-0.78%|
|SEP ’21 Chicago SRW||$ / BSH||6.405||6.32||6.365||-0.05||-0.78%|
|DEC ’21 Chicago SRW||$ / BSH||6.45||6.37||6.415||-0.045||-0.70%|
|MAR ’22 Chicago SRW||$ / BSH||6.485||6.4075||6.4175||-0.0775||-1.19%|
|MAY ’21 Kansas Metropolis HRW||$ / BSH||5.885||5.7925||5.845||-0.02||-0.34%|
|JUL ’21 Kansas Metropolis HRW||$ / BSH||5.96||5.87||5.925||-0.0175||-0.29%|
|SEP ’21 Kansas Metropolis HRW||$ / BSH||6.02||5.9425||5.9925||-0.015||-0.25%|
|DEC ’21 Kansas Metropolis HRW||$ / BSH||6.11||6.04||6.09||-0.015||-0.25%|
|MAR ’22 Kansas Metropolis HRW||$ / BSH||6.18||6.145||6.18||-0.0175||-0.28%|
|MAY ’21 MLPS Spring Wheat||$ / BSH||6.54||6.42||6.455||-0.085||-1.30%|
|JUL ’21 MLPS Spring Wheat||$ / BSH||6.61||6.5||6.5275||-0.085||-1.29%|
|SEP ’21 MLPS Spring Wheat||$ / BSH||6.675||6.5675||6.595||-0.08||-1.20%|
|DEC ’21 MLPS Spring Wheat||$ / BSH||6.75||6.665||6.665||-0.0925||-1.37%|
|MAR ’22 MLPS Spring Wheat||$ / BSH||6.8||6.8||6.8||-0.0175||-0.26%|
|JUN ’21 ICE Greenback Index||$||92.335||92.02||92.06||-0.1||-0.11%|
|MA ’21 Gentle Crude||$ / BBL||60.18||58.73||60.06||0.74||1.30%|
|JU ’21 Gentle Crude||$ / BBL||60.2||58.77||60.11||0.76||1.26%|
|MAY ’21 ULS Diesel||$ /U GAL||1.8353||1.7877||1.8335||0.0259||1.43%|
|JUN ’21 ULS Diesel||$ /U GAL||1.8363||1.7902||1.8341||0.0241||1.33%|
|MAY ’21 Gasoline||$ /U GAL||1.983||1.9435||1.9781||0.016||0.82%|
|JUN ’21 Gasoline||$ /U GAL||1.9824||1.944||1.9786||0.0153||0.78%|
|APR ’21 Feeder Cattle||$ / CWT||0||#N/A||144.75||0||0.00%|
|MAY ’21 Feeder Cattle||$ / CWT||0||#N/A||149.625||0||0.00%|
|AP ’21 Dwell Cattle||$ / CWT||0||#N/A||123.425||0||0.00%|
|JU ’21 Dwell Cattle||$ / CWT||0||#N/A||122.575||0||0.00%|
|APR ’21 Dwell Hogs||$ / CWT||0||#N/A||103.475||0||0.00%|
|MAY ’21 Dwell Hogs||$ / CWT||0||#N/A||106.375||0||0.00%|
|APR ’21 Class III Milk||$ / CWT||17.6||#N/A||17.68||0||0.00%|
|MAY ’21 Class III Milk||$ / CWT||19.25||#N/A||19.38||0||0.00%|
|JUN ’21 Class III Milk||$ / CWT||19.13||#N/A||19.45||0||0.00%|