Morning Market Review for May 5, 2021

Plus – essentially the most up to date climate forecasts from the U.S. and overseas

• Corn up 3-7 cents
• Soybeans up 8-13 cents, soyoil up $0.43/lb, soymeal up $3.60/ton
• Wheat up 2-6 cents

*Costs as of 6:50 am CDT.

Editor’s Notice: Our newest Feedback from the Field evaluation is dwell! This week’s article options an unique have a look at corn planting progress on the Holland household dairy farm in northwestern Illinois in addition to photographic proof of my favourite nephew, Gus!

The Suggestions from the Subject sequence is an open-sourced platform for U.S. growers to share and examine rising circumstances throughout the nation. Wish to get in on the motion?! Click here to take our ongoing farmer survey on crop progress at any level within the 2021 grain season. Our Google Map, up to date every day, offers all previous responses for farm readers.

Corn

July 2021 corn futures costs climbed again above $7/bushel this morning on tightening international provide issues as dry climate continues to emphasize yield potential in Brazil’s safrinha corn crop. March 2021 U.S. corn exports rose to a brand new report excessive, including one other layer of worth help. Positive aspects had been capped by favorable planting circumstances throughout the Midwest anticipated later in the present day.

Export information launched by the U.S. Commerce Division yesterday noticed March 2021 corn exports rise to 364.5 million bushels, a 122.3-million-bushel enhance from the month prior. The month-to-month haul translated to $2.4 billion for the U.S. meals financial system and was the best month-to-month corn export quantity on report since 2008. China edged out Japan as the highest vacation spot for U.S. corn in March 2021, snapping up 68.8 million bushels, or 18% of whole March 2021 shipments.

Equally, fast delivery paces to China of U.S. ethanol led exports of the corn-fed gasoline additive to their second highest volumes over the previous yr. U.S. ethanol exports in March 2021 totaled 133.0 million gallons with 48.3 million of these gallons going to China. Canada was the highest vacation spot for 34.2 million gallons.

July 2021 corn futures briefly traded above $7/bushel yesterday earlier than a spherical of technical promoting settled in. The air is thinning on the prime of those markets, Farm Futures contributing analyst Bryce Knorr factors out. So, what is going to it take for corn and soybean costs to proceed an upward cost?

Knorr nods at planting paces for short-term worth momentum. However subsequent Wednesday’s WASDE report might present the subsequent stage of worth help for grain markets. Knorr outlines technical ranges of help and resistance for each outdated and new corn and soybean crops within the newest Ag Marketing IQ column.

Soybeans

Soybean futures costs inched up this morning on lingering issues about tightening international provides a day after Brazilian soybean exporters had been forecast to see decrease May 2021 soybean shipments in comparison with April’s report.

It’s probably the primary signal of China transferring away from high-priced soybean consumers and shifting to cheaper livestock feed alternate options, together with wheat and sorghum.

Wheat

Wheat costs edged greater this morning with the assistance of a weaker greenback in a single day. Rising international livestock feed demand – notably from China – supported greater costs this morning, although the forecast of a bumper wheat crop to be planted in Argentina for the 2021/22 advertising yr restricted the complicated’s upward worth potential.

The Buenos Aires Grains Alternate expects Argentine farmers will produce 698.1 million bushels of wheat in 2021/22. If realized, the full haul would match 2018/19’s report manufacturing excessive. Argentina is the world’s seventh-largest wheat exporter.

Climate

An opportunity of showers will shift east from the Central Rockies in the present day into the Central Plains, in accordance with NOAA’s short-range forecasts. An opportunity of snow is probably going on the northern fringe of the storm system, which might go away a wintery combine in its path because it costs via North Dakota.

Farmers within the Midwest are prone to get pleasure from clear skies in the present day, permitting planting exercise to renew by this afternoon as temperatures attain the 60s-70s. Tomorrow is prone to see scattered showers throughout the Plains and rain within the Higher Mississippi River Valley. As much as a half inch of accumulation is predicted within the subsequent 24 hours within the area.

USDA’s World Agricultural Outlook Board’s weekly Weather and Crop Bulletin confirmed indicators of reduction for drought-stressed areas of the Plains for the primary time in months. The Central Plains moved right into a class of long-term drought final week as persistent dryness had formally lingered for over six months.

However after showers blanked the area earlier this week, WAOB’s replace launched yesterday noticed a number of areas within the Excessive and Southern Plains shift out of extreme drought threats. Drought continues to accentuate within the Northern Plains, however in prime corn and soybean producing areas, the newest outlook suggests a little bit of reduction from mounting issues about yield shortfalls attributable to drought.

Extra reduction might be arriving as quickly as subsequent week. NOAA’s 6- to 10-day forecast estimates the chance for above common rainfall at 33%-40% in drought-riddled areas of the Plains and Midwest. The Northern Plains will probably expertise continued dryness, which might restrict plant improvement for the newly sown spring wheat crop.

Cooler temperatures throughout a lot of the Plains and Midwest subsequent week will permit the water to soak deep into the soil, giving newly planted crops an opportunity to flourish if the temperatures don’t considerably degrade soil heat.

Up to date 30-day forecasts from NOAA trace at extra precipitation via the tip of the month for the Japanese half of the U.S. Distinctive drought will proceed to plague the Southwest as temperatures steadily start to heat. As May goes on, it appears more and more probably that markets will depend on crops within the Japanese Corn Belt to supply bountiful sufficient yields to offset their drought broken counterparts within the Plains.

The World Agricultural Outlook Board launched an updated international weather update yesterday, offering extra insights into growing crop circumstances throughout the globe. By way of the week ending May 1, depleted soil moisture ranges in Western Europe had been replenished, offering some reduction to winter wheat, canola, and barely crops in areas that suffered frost injury a number of weeks in the past.

Within the Black Sea, rain showers over the past week recharged winter wheat crops permitting crops to proceed to develop in favorable vegetation circumstances. Sizzling temperatures in Asia continued, although China’s key wheat-producing area within the south and southeast noticed showers that supplied much-needed reduction to drought circumstances.

However all eyes remained centered on climate in South America, the place corn improvement and soybean harvest proceed to dominate farmers’ focus. Argentina has benefited from dry circumstances as corn, soybean, and cotton harvests ensue.

“Beneficial rain continued in Brazil’s northern corn and cotton regions,” WAOB’s report defined. “But unseasonable dryness persisted farther south, where moisture remained limited for vegetative to reproductive corn and emerging wheat.”

Financials

Coronavirus instances within the U.S. rose by 41,326 instances from yesterday to 32,513,455 instances as of this morning in accordance with the Johns Hopkins Coronavirus Resource Center. The demise toll elevated by 938 lives to 578,503 deaths as of press time.

Planters are rolling, spring fertilizer is being utilized, and 1,000,000 different actions are taking place on farms throughout the nation. However Virginia Tech agricultural economist Dave Kohl doesn’t suppose farmers ought to let monetary monitoring take a again seat to spring planting actions.

Within the newest Road Warrior column, Kohl advises farmers to regulate debt to asset and working expense to income ratios throughout planting season. It’s simple to let hidden prices add up within the chaos of planting, however Kohl factors out that sustaining monetary self-discipline this yr is crucial, particularly as enter prices and inflation are on the uptick.

“This past year, government stimulus and high grain prices have lifted profits to right the financial ship,” Kohl concludes. “However, what is your plan post-government payments when commodity prices moderate and high input costs persist to keep your business out of these conditions?”

U.S. inventory futures had been on the rise this morning, buoyed by a restoration in know-how shares and easing issues about inflation and rising rates of interest. Treasury Secretary Janet Yellen made feedback yesterday about probably rising rates of interest to “keep the economy from overheating,” although later defined that the feedback weren’t a advice to the Federal Reserve to boost charges.

Yellen stays unconcerned about rising inflation charges, suggesting that the uptick is prone to be short-term because the U.S. financial system emerges from the pandemic. “Today is a bit of a relief rally,” Edward Park, chief funding officer at Brooks Macdonald, informed the Wall Street Journal this morning. “Markets are grinding higher and they are grinding higher on a relative basis because equities remain the most attractive. But there is this growing question of how long monetary policy will remain accommodative.”

S&P 500 futures rose 0.41% to $4,174.50 on the overarching sentiments.