Rising grain demand amid tightening home provide outlook reverses yesterday’s corn losses
- Corn up 4-6 cents
- Soybeans up 12-15 cents, soyoil up $1.00/lb, soymeal up $0.70/ton
- Minneapolis wheat up 12-15 cents; Chicago & Kansas Metropolis wheat up September 11 cents
*Costs as of 6:50 am CDT.
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Chart of the day
Stay cattle futures are buying and selling decrease than lean hog futures for the primary time since August 2001. The inversion started final Friday and was exacerbated over the past two buying and selling periods by decrease beef costs resulting from JBS plant closures throughout North America and Australia resulting from a ransomware cyber-attack by Russian hackers.
It’s a feat that hardly ever happens over time, with the present lively contracts solely seeing this worth inversion a handful of occasions over the previous twenty years. The worldwide beef sector has confronted operational challenges over the previous few weeks, with larger corn costs and Argentina implementing a ban on beef exports to ease home meals costs.
However pork demand stays agency and U.S. provides are tight as producers stay considerably hesitant to increase as pandemic-induced slaughtering considerations proceed to persist within the post-pandemic period.
Corn costs moved larger in a single day after yesterday’s losses as dry climate considerations within the Higher Midwest and Plains continues to domesticate uncertainty about 2021 yield projections. A heat and dry forecast anticipated over the subsequent two weeks might stress progress situations for the younger crop, sending futures costs $0.04-$0.06/bushel larger.
The U.S. Vitality Data Administration releases up to date ethanol manufacturing data right now in its weekly Petroleum Stock Standing report. As summer time approaches, gas demand is growing with final week’s report displaying a 15% improve in each day gasoline consumption since early March 2021.
That bodes properly for ethanol manufacturing, which leveled off in final week’s report at a snug pre-pandemic fee. For the week ending Could 21, ethanol output fell 2% to 42.5 million gallons/day. Ethanol inventories fell to the bottom stage since 2016 because the business adjusts manufacturing capability to present mixing demand ranges.
However gasoline demand has largely returned to pre-pandemic ranges, with a weekly improve of two.8% in nationwide gasoline demand bringing the weekly complete to 398.1 million gallons/day. Ethanol mixing charges slowed barely final week, although primarily based on diminished ethanol stock ranges and rising gas demand, this seems to be a brief manufacturing adjustment.
AgMarket.Web’s Invoice Biedermann is featured repeatedly within the Ag Advertising IQ columns, however yesterday Biedermann made a visitor look on the Midweek Markets podcast. Farm Futures Ben Potter quizzes Biedermann on how the 2021 rising season is progressing within the newest episode whereas Biedermann additionally supplies a sneak peak at his upcoming Farm Futures Summit presentation.
Should you or somebody you realize is excited about listening to extra of Biedermann’s ideas about the place these markets are heading, try our Farm Futures Enterprise Summit, held June 16-17 his yr on the Coralville Marriot in Coralville, Iowa. For extra data and to register, go to FarmFuturesSummit.com.
The recent and dry U.S. forecast additionally lifted futures costs within the soy complicated, the place a bountiful 2021 crop was already anticipated to fall in need of anticipated utilization charges. An enormous quantity of soybean acres – together with new soybean acres planted this yr – are anticipated to be impacted by the upcoming dry spell, pushing soybean futures $0.12-$0.16/bushel larger this morning.
Soyoil futures raced to a 10-year excessive this morning after gaining over $2/lb over the past two buying and selling periods. “The edible oil aspect is extra bullish with larger use in biofuels. Vitality costs are additionally climbing,” Nationwide Australia Financial institution agribusiness economist Phin Ziebell advised Reuters in a single day.
Brazil’s ongoing drought may gain advantage American growers for a delicate causes. What’s being labeled as Brazil’s worst water disaster in practically a century is slowing river motion of grains in Brazil because the dry climate shrinks riverbeds and reduces delivery volumes alongside the best way.
“If companies are unable to use the river to move goods because water levels fall, they would resort to trucks,” Thiago Pera, logistics analysis coordinator at ESALQ, Sao Paulo College’s school of agriculture, advised Reuters. “This will raise the cost of freight as diesel prices are rising.”
Whereas infrastructure enhancements over the past decade have helped to cut back delivery points, particularly on the Parana River, river navigation stays difficult whereas water ranges are so low. Delivery season is in full swing in Brazil, with soybean exports persevering with at a gentle clip and safrinha corn exports coming to market.
Volatility has been the one constant consider grain markets over the previous two weeks. Advance Buying and selling’s Brady Huck reminds farmers there are nonetheless alternatives available so long as advertising plans permit the pliability to seize these revenue openings.
“As we are all aware, the market moves, and things change,” Huck explains within the newest Ag Marketing IQ column, mentioning that choices are a great way to hedge in opposition to volatility, regardless of the fee. “Opting to not option-ize your marketing decisions may very well end up ‘more expensive’ if we get too directional or too black and white with our marketing decisions.”
Wheat costs charged 1.3%-1.5% larger this morning, led by a $0.08-$0.14/bushel improve in Minneapolis futures. The U.S. climate considerations will possible exacerbate drought situations within the Northern Plains, the place the younger spring wheat crop is already struggling to take care of progress following an acreage minimize this yr. A stronger greenback capped the morning’s good points.
Extra rain is within the forecast for the Japanese Corn Belt right now, in accordance with NOAA’s short-range forecasts. The Japanese Corn Belt is more likely to see as much as an inch of accumulation over the subsequent 24 hours, thwarting any last-minute planting – or replanting – progress within the area till the weekend.
Coronavirus circumstances within the U.S. rose to 33,307,976 circumstances as of this morning in accordance with the Johns Hopkins Coronavirus Resource Center. The loss of life toll elevated to 595,839 deaths as of press time. In line with the CDC, practically 51% of the entire U.S. inhabitants has acquired at the very least one vaccine. Over 136 million People (41%) are absolutely vaccinated. Over 2.0 billion vaccine doses have been administered worldwide.
Rising enter costs are weighing heavy on producers’ minds, in accordance with the newest studying from the Purdue University/CME Group Ag Economy Barometer launched yesterday. After producer confidence hit a file excessive in April, that optimism eroded barely in Could as rising working prices and provide chain volatility minimize the outlook on spending for equipment and development.
About 59% of respondents lowered their expectations for development plans relative to a yr in the past. “Rising construction costs are likely a contributing factor to weaker construction plans,” James Mintert, the barometer’s principal investigator and director of Purdue College’s Heart for Business Agriculture, defined within the video replace.
Different highlights embrace expectations for larger farmland values and rents, in addition to blended sentiment between crop and livestock outlooks. Moreover, farmers proceed to stay involved about uncertainty surrounding U.S. tax insurance policies.
Accrual accounting for a farming operation could contain a bit of additional work, however CPA Bob Krogmeier argues that it could possibly reap dividends for farmers in the long term. Within the newest By the Books column, Krogmeier explains how accrual accounting strategies utilized to accounts payable may also help to supply higher distinguish between working money flows and tax transactions.
“If you’re not sure if your accounts payable is correct in your accounting software – or if you are interested in keeping accrual records – contact professional bookkeepers and tax preparers,” Krogmeier concludes. “It may cost a little more but you get the benefit of having accounting records that allow you to get the greatest benefit from your taxes and decision-making information.”
U.S. inventory futures fell this morning on considerations about right now’s weekly jobs report and lingering worries in regards to the state of the worldwide provide chain and labor availability within the post-pandemic period. The cumulative considerations are underscored by rising inflation and a possible change in financial coverage to fight dangerous long-term inflationary pressures in opposition to the financial system. S&P 500 futures edged 0.61% decrease to $4,180.50 this morning.
|Morning Ag Commodity Costs – 6/3/2021|
|Contract||Items||Excessive||Low||Final||Web Change||% Change|
|JUL ’21 CORN||$ / BSH||6.85||6.75||6.8075||0.0575||0.85%|
|SEP ’21 CORN||$ / BSH||6.01||5.9325||5.985||0.0525||0.88%|
|DEC ’21 CORN||$ / BSH||5.81||5.735||5.79||0.0625||1.09%|
|MAR ’22 CORN||$ / BSH||5.8725||5.7975||5.8525||0.06||1.04%|
|MAY ’22 CORN||$ / BSH||5.905||5.835||5.8825||0.0575||0.99%|
|JUL ’22 CORN||$ / BSH||5.9||5.83||5.8725||0.05||0.86%|
|SEP ’22 CORN||$ / BSH||5.2225||5.2025||5.2025||0.0325||0.63%|
|JUL ’21 SOYBEANS||$ / BSH||15.89||15.6525||15.8||0.175||1.12%|
|AUG ’21 SOYBEANS||$ / BSH||15.4125||15.1875||15.325||0.1625||1.07%|
|SEP ’21 SOYBEANS||$ / BSH||14.7225||14.5175||14.64||0.1675||1.16%|
|NOV ’21 SOYBEANS||$ / BSH||14.3875||14.1525||14.2875||0.15||1.06%|
|JAN ’22 SOYBEANS||$ / BSH||14.385||14.17||14.2975||0.15||1.06%|
|MAR ’22 SOYBEANS||$ / BSH||14.135||13.93||14.0575||0.15||1.08%|
|MAY ’22 SOYBEANS||$ / BSH||14.0525||13.8525||13.985||0.1425||1.03%|
|JUL ’22 SOYBEANS||$ / BSH||14.0325||13.84||13.98||0.145||1.05%|
|AUG ’22 SOYBEANS||$ / BSH||13.78||13.78||13.78||0.115||0.84%|
|JUL ’21 SOYBEAN OIL||$ / LB||72.13||70.78||71.37||0.99||1.41%|
|AUG ’21 SOYBEAN OIL||$ / LB||68.21||66.97||67.62||0.93||1.39%|
|JUL ’21 SOY MEAL||$ / TON||397.2||393.7||394.6||0.6||0.15%|
|AUG ’21 SOY MEAL||$ / TON||398.5||395.2||396.5||1.2||0.30%|
|SEP ’21 SOY MEAL||$ / TON||398.2||394.7||396.2||1.3||0.33%|
|OCT ’21 SOY MEAL||$ / TON||395.3||391.7||394.3||2.2||0.56%|
|DEC ’21 SOY MEAL||$ / TON||396.6||392.2||394.5||1.3||0.33%|
|JUL ’21 Chicago SRW||$ / BSH||6.99||6.8825||6.985||0.11||1.60%|
|SEP ’21 Chicago SRW||$ / BSH||7.0325||6.935||7.0275||0.1025||1.48%|
|DEC ’21 Chicago SRW||$ / BSH||7.1||7.01||7.095||0.095||1.36%|
|MAR ’22 Chicago SRW||$ / BSH||7.165||7.085||7.165||0.09||1.27%|
|MAY ’22 Chicago SRW||$ / BSH||7.13||7.09||7.1125||0.04||0.57%|
|JUL ’21 Kansas Metropolis HRW||$ / BSH||6.445||6.34||6.44||0.1025||1.62%|
|SEP ’21 Kansas Metropolis HRW||$ / BSH||6.52||6.4175||6.5175||0.1||1.56%|
|DEC ’21 Kansas Metropolis HRW||$ / BSH||6.6325||6.5325||6.62||0.085||1.30%|
|MAR ’22 Kansas Metropolis HRW||$ / BSH||6.72||6.63||6.715||0.08||1.21%|
|MAY ’22 Kansas Metropolis HRW||$ / BSH||6.8||#N/A||6.7025||0||0.00%|
|JUL ’21 MLPS Spring Wheat||$ / BSH||7.965||7.845||7.9475||0.1175||1.50%|
|SEP ’21 MLPS Spring Wheat||$ / BSH||8.0125||7.8925||7.985||0.1025||1.30%|
|DEC ’21 MLPS Spring Wheat||$ / BSH||8.0125||7.8975||7.98||0.0775||0.98%|
|MAR ’22 MLPS Spring Wheat||$ / BSH||8.0075||7.9025||7.9675||0.065||0.82%|
|MAY ’22 MLPS Spring Wheat||$ / BSH||7.9575||#N/A||7.8575||0||0.00%|
|JUN ’21 ICE Greenback Index||$||90.135||89.88||90.015||0.114||0.13%|
|JU ’21 Mild Crude||$ / BBL||69.4||68.54||68.71||-0.12||-0.17%|
|AU ’21 Mild Crude||$ / BBL||69.18||68.34||68.48||-0.15||-0.22%|
|JUL ’21 ULS Diesel||$ /U GAL||2.1236||2.099||2.1026||-0.0045||-0.21%|
|AUG ’21 ULS Diesel||$ /U GAL||2.124||2.1016||2.1046||-0.0047||-0.22%|
|JUL ’21 Gasoline||$ /U GAL||2.2127||2.183||2.184||-0.0101||-0.46%|
|AUG ’21 Gasoline||$ /U GAL||2.2075||2.1793||2.1806||-0.0092||-0.42%|
|AUG ’21 Feeder Cattle||$ / CWT||0||#N/A||152.325||0||0.00%|
|SEP ’21 Feeder Cattle||$ / CWT||0||#N/A||154.8||0||0.00%|
|JU ’21 Stay Cattle||$ / CWT||0||#N/A||117.125||0||0.00%|
|AU ’21 Stay Cattle||$ / CWT||0||#N/A||119.25||0||0.00%|
|JUN ’21 Stay Hogs||$ / CWT||0||#N/A||118.25||0||0.00%|
|JUL ’21 Stay Hogs||$ / CWT||0||#N/A||118.475||0||0.00%|
|JUN ’21 Class III Milk||$ / CWT||17.38||17.29||17.38||0.06||0.35%|
|JUL ’21 Class III Milk||$ / CWT||17.95||17.95||17.95||0.06||0.34%|
|AUG ’21 Class III Milk||$ / CWT||18.35||18.35||18.35||0.01||0.05%|