Morning Market Review for April 19, 2021

scyther5/Thinkstock Markets-122316-scyther5-ThinkstockPhotos-2000
Cold temps heat up corn prices. (Comments are updated by 7:30 a.m. Central Time.)

Soybeans, wheat follow gains on weakening dollar, weather concerns

  • Corn up 6-8 cents
  • Soybeans up 4-10 cents, soyoil down $0.04/lb, soymeal up $2.40/ton
  • Wheat up 3-6 cents

*Prices as of 6:50 am CDT

Corn

Cold weather concerns are beginning to take a more significant toll on corn acreage potential this spring, as Chicago corn prices rallied $0.06-$0.08/bushel higher on planting delays. Planting season is still in its early days, but farmers could begin switching to soybean acreage if the delays continue. May 2021 corn prices hovered around $5.9375/bushel – still below the $6/bushel benchmark, but within striking distance.

All eyes will be on corn planting progress in this afternoon’s latest Crop Progress report, due out from USDA around 3pm CDT. A cold week in the Heartland and snow across the Northern and Central Plains stalled a lot of planters last week.

A South-Central Nebraska farmer summed it up best in the latest round of responses from the Feedback from the Field series. “Colder than normal weather lately with about an inch of moisture coming as wet snow and light rain leading into the weekend will push planting back another 5 days at least,” the farmer reported. “Don't expect to see much corn or bean acreage planted before April 25th.”

Corn briefly passed the $6/bushel threshold last Thursday, though nearby May 2021 contract prices ended the week at $5.855/bushel. The cooler weather forecast has AgMarket.Net’s Matt Bennett a little nervous about the newly planted soybean crop on his farm, but there’s a few other marketing items Bennett is keeping top of mind.

First – Bennet advises to not oversell given current prices. “How tempting is it to get heavily sold at the best prices we’ve seen in years?” Bennett muses. “It certainly takes discipline to not get carried away.” But if 2021 fails to produce adequate rainfall, producers could end up contractually obligated to fill contracts that yields do not support.

Second – as prices move higher, don’t hesitate to book some sales, especially if current prices are profitable for your farm. Bennett advises farmers to not wait too long to book sales. “We can all make more money at $5-plus corn than we can $3 corn.”

Bennett emphasizes staying flexible with marketing plans over the spring planting season. It’s important to capitalize on current prices, especially as they hover in the most profitable territory seen in years. But set your farm up for success.

“I like placing a floor under the market to quantify a worst-case scenario or selling corn and keeping ownership through a call above the market,” Bennet shares in the latest Ag Marketing IQ column. “Given how volatile our markets could be this summer, an insulated hedge of some sort where we can participate if this market explodes seems like a great idea to me.”

Soybeans

Planting delays pulled up prices in the soybean complex this morning, though not near as high as those of corn. Soy futures prices rose $0.04-$0.10/bushel with the help of a weakening dollar and rapid domestic usage rates.

Rising COVID-19 cases in India put a dent in the global vegetable oil complex overnight, as concerns about further lockdown measures sent palm oil prices 0.35% lower. U.S. soyoil futures followed the decline, though losses were offset by growing soyoil-based biodiesel demand in the U.S.

India is the world’s largest importer of vegetable oil. However, palm oil imports are expected to drop to the lowest level in nine years amid restaurant closures as the pandemic rages on in India.

This will be the first week that USDA reports on soybean planting progress in the latest Crop Progress report. Farmer responses from Farm Futures’ Feedback from the Field series suggest that few farmers have had favorable enough conditions to advance far into soybean sowing in the earliest days of planting season.

Some reports have popped up on this analyst’s radar of farmers in Southern and Central Illinois starting to plant soybeans before corn. But cool temperatures are likely to limit planting speeds, so don’t expect significant progress in today’s Crop Progress report.

Wheat

A weakening dollar strengthened wheat export prospects overnight, sending wheat futures prices $0.03-$0.06/bushel higher in after-hours trading. Concerns about cooler temperatures in the Southern Plains gave a steady boost to Kansas City futures prices, though this afternoon’s Crop Progress report will likely shed more light on the state of the emerging winter wheat crop in the region.

How many times can we kill the winter wheat crop this year? We are about to find out over the next couple of weeks, sports fans. Despite the February cold snap and drought concerns, winter wheat conditions in the Southern Plains have largely stabilized over the past two Crop Progress reporting weeks.

But cooler temperatures are on the horizon in the Southern Plains over the next couple weeks. Frost damage will loom high on farmers’ and traders’ minds alike as the winter wheat crop continues to develop in its heading stage.

Snowfall in the Northern Plains last week likely slowed spring wheat planting progress. But after getting off to a rapid start, farmers in the Northern Plains may have a bit of wiggle room to cope with last week’s snow. Of course, there’s never enough time during planting season and in a year when acreage forecasts are already reduced, there is more risk to final acreage when planting delays begin to mount.

Weather

Snow is expected to fall in a thin band stretching from Wyoming to Northern Illinois today, according to NOAA’s short-range forecasts. The system is likely to push more snow up into the Dakotas overnight, while the storm system’s southern edge will blanket the Southern Plains with rain tomorrow morning.

Cool temperatures will continue to cover much of the upper Midwest and Plains today, with temperatures expected to dip below freezing tonight. About one to four inches of snow are likely across the central Plains and Midwest through midweek.

Financials

Coronavirus cases in the U.S. rose to 31,670,353 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased to 567,217 deaths as of press time.

Farm Futures will be hosting its Farm Futures Summit in Coralville, Iowa on June 16-17. Sessions will highlight the latest risk management strategies, best practices, market outlooks, and more. Top speakers include former U.S. trade ambassador Gregg Doud, who will offer insights on negotiating the Phase One trade agreement with China, and Dick Wittman, who will provide farmers guidance on the best ways to manage a family farming operation.

The pandemic has certainly taken a toll on everyone over this past year. But the one point that was hammered home during the darkest days of the pandemic last spring was the need for financial acumen in the farming community. Did the pandemic catch your farm’s financial record-keeping off guard? If so, Farm Futures’ Ag Finance Bootcamp on June 15 in Coralville, Iowa may be of great use to you.

The Ag Finance Bootcamp offers farmers insights on managing banker relationships, tax preparation, investment planning, and ultimately, how to become a more financially forward-focused operation. Interested in either the Ag Finance Bootcamp, Farm Futures Summit, or both? Check out the website for registration and more information.

Happy Monday! Catch up on all of last week’s market highlights after USDA release the April WASDE report and the latest planting progress news. Spoiler alert – markets will continue closely watching planting progress this week. Also, here are a few other headlines making news in the agribusiness community last week.

Stock futures edged back from record highs overnight, as profit takers took the tops of recent rallies in the overnight trading session and evaluated the sustainability of the rally going forward. Rising COVID-19 infections in the U.S. and slowing vaccination rates eroded some of the optimism from the fact that 200 million vaccine doses have been administered in the U.S. and around 40% of Americans have at least one vaccine, as of Saturday. S&P 500 futures fell 0.25% to $4,165.50 on the sentiment.

Morning Ag Commodity Prices - 4/19/2021
Contract Units High Low Last Net Change % Change
MAY '21 CORN $ / BSH  5.9675 5.8875 5.9325 0.0775 1.32%
JUL '21 CORN $ / BSH  5.845 5.765 5.8125 0.075 1.31%
SEP '21 CORN $ / BSH  5.3775 5.325 5.36 0.065 1.23%
DEC '21 CORN $ / BSH  5.2 5.15 5.1925 0.07 1.37%
MAR '22 CORN $ / BSH  5.265 5.2225 5.26 0.07 1.35%
MAY '22 CORN $ / BSH  5.3075 5.2525 5.3 0.0675 1.29%
JUL '22 CORN $ / BSH  5.32 5.255 5.3125 0.0625 1.19%
MAY '21 SOYBEANS $ / BSH  14.475 14.3475 14.43 0.0975 0.68%
JUL '21 SOYBEANS $ / BSH  14.365 14.235 14.325 0.1 0.70%
AUG '21 SOYBEANS $ / BSH  13.935 13.815 13.89 0.08 0.58%
SEP '21 SOYBEANS $ / BSH  13.22 13.1175 13.185 0.0725 0.55%
NOV '21 SOYBEANS $ / BSH  12.84 12.725 12.8125 0.0725 0.57%
JAN '22 SOYBEANS $ / BSH  12.8275 12.725 12.7975 0.065 0.51%
MAR '22 SOYBEANS $ / BSH  12.55 12.4525 12.5175 0.0525 0.42%
MAY '22 SOYBEANS $ / BSH  12.4825 12.3925 12.4525 0.05 0.40%
JUL '22 SOYBEANS $ / BSH  12.45 12.42 12.4325 0.04 0.32%
MAY '21 SOYBEAN OIL  $ / LB 56.73 56.08 56.31 -0.02 -0.04%
JUL '21 SOYBEAN OIL  $ / LB 54.55 53.96 54.16 -0.08 -0.15%
MAY '21 SOY MEAL $ / TON 405.5 401.7 404.8 2.6 0.65%
JUL '21 SOY MEAL $ / TON 409.7 405.6 408.7 2.3 0.57%
AUG '21 SOY MEAL $ / TON 405.6 402.1 405 2.4 0.60%
SEP '21 SOY MEAL $ / TON 401.2 397.4 400.2 3.2 0.81%
OCT '21 SOY MEAL $ / TON 395 390.4 394.3 3.1 0.79%
MAY '21 Chicago SRW $ / BSH  6.6075 6.5225 6.5525 0.0275 0.42%
JUL '21 Chicago SRW $ / BSH  6.63 6.5425 6.5775 0.0275 0.42%
SEP '21 Chicago SRW $ / BSH  6.6425 6.56 6.59 0.0225 0.34%
DEC '21 Chicago SRW $ / BSH  6.685 6.6075 6.6375 0.02 0.30%
MAR '22 Chicago SRW $ / BSH  6.725 6.6575 6.6825 0.0175 0.26%
MAY '21 Kansas City HRW $ / BSH  6.185 6.1 6.1325 0.04 0.66%
JUL '21 Kansas City HRW $ / BSH  6.2575 6.1725 6.205 0.0425 0.69%
SEP '21 Kansas City HRW $ / BSH  6.315 6.2525 6.2675 0.0425 0.68%
DEC '21 Kansas City HRW $ / BSH  6.3875 6.32 6.36 0.0425 0.67%
MAR '22 Kansas City HRW $ / BSH  6.4625 6.4225 6.4325 0.0375 0.59%
MAY '21 MLPS Spring Wheat $ / BSH  6.705 6.65 6.67 0.0275 0.41%
JUL '21 MLPS Spring Wheat $ / BSH  6.7775 6.7225 6.74 0.0275 0.41%
SEP '21 MLPS Spring Wheat $ / BSH  6.8325 6.7725 6.8075 0.0425 0.63%
DEC '21 MLPS Spring Wheat $ / BSH  6.88 6.855 6.8575 0.03 0.44%
MAR '22 MLPS Spring Wheat $ / BSH  6.9375 #N/A 6.875 0 0.00%
JUN '21 ICE Dollar Index $ 91.75 91.025 91.105 -0.439 -0.48%
 MA '21 Light Crude $ / BBL  63.35 62.63 62.96 -0.17 -0.27%
 JU '21 Light Crude $ / BBL  63.42 62.67 63.02 -0.17 -0.27%
MAY '21 ULS Diesel $ /U GAL 1.8995 1.8826 1.8863 -0.0094 -0.50%
JUN '21 ULS Diesel $ /U GAL 1.9008 1.885 1.8884 -0.0091 -0.48%
MAY '21 Gasoline $ /U GAL 2.0434 2.0298 2.0348 -0.0051 -0.25%
JUN '21 Gasoline $ /U GAL 2.0462 2.0324 2.0378 -0.0048 -0.23%
APR '21 Feeder Cattle $ / CWT 0 #N/A 139.625 0 0.00%
MAY '21 Feeder Cattle $ / CWT 0 #N/A 143.725 0 0.00%
 AP '21 Live Cattle $ / CWT 0 #N/A 120.85 0 0.00%
 JU '21 Live Cattle $ / CWT 0 #N/A 119.175 0 0.00%
MAY '21 Live Hogs $ / CWT 0 #N/A 102.475 0 0.00%
JUN '21 Live Hogs $ / CWT 0 #N/A 101.7 0 0.00%
APR '21 Class III Milk $ / CWT 17.59 #N/A 17.64 0 0.00%
MAY '21 Class III Milk $ / CWT 19.04 19.04 19.04 0 0.00%
JUN '21 Class III Milk $ / CWT 19.12 19.12 19.12 0.06 0.31%
Hide comments
account-default-image

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish