Morning Market Review for April 20, 2021

scyther5/Thinkstock Markets-122316-scyther5-ThinkstockPhotos-2000
Corn flirts with $6/bushel. (Comments are updated by 7:30 a.m. Central Time.)

Soybeans rise on export prospects, planting delays

  • Corn up 4-6 cents
  • Soybeans up 10-23 cents, soyoil up $1.65/lb, soymeal up $4.50/ton
  • Wheat up 4-6 cents

*Prices as of 6:50 am CDT.

Corn

Corn prices continued a two-day winning streak this morning as cold and wet weather stalled planting progress in the greater Midwest again, raising yield concerns about plants already in the ground and reduced acreage potential for the 2021 crop. The worries sent May 2021 futures prices on the Chicago Board of Trade to $5.98/bushel, nearing the crucial $6/bushel benchmark.

Tightening supplies from China led to another strong week of export loading volumes last week, adding another layer of support to corn prices.

Despite a week of cold temperatures and scatterings of snow and rain, corn planting progress around the U.S. continued in rapid fashion last week, rising 4% from the previous week to 8% complete as of April 18 in yesterday’s weekly Crop Progress update from USDA. Progress remains largely in line with the five-year average for the same reporting period, though yesterday’s results were a shade lower than the average trade estimate of 9%.

Progress remains accelerated in Southern States, especially Texas and North Carolina, where 51% and 13% of the crop, respectively, is already emerged. Nationwide, 2% of the planted corn crop has already emerged from the soil, up from the five-year average of 1%.

How will planting progress shake out this week? Rain and snow will continue to move through the Northern Plains and Upper Mississippi River Valley today, with the system making its way through the Eastern Corn Belt by tomorrow. While planting will likely be delayed a few days in these regions as soils soak in the moisture, expect progress in areas not affected by this system to continue moving forward at a rapid pace.

As domestic grain supplies tighten in Brazil, the country’s Agriculture Ministry agreed yesterday to lift import duties on soybeans, corn, soymeal, and soyoil until the end of calendar year 2021. The move is widely seen as an effort to curb inflation rates amid soaring global grain prices.

This could benefit U.S. grain exporters, who would likely be the source of Brazil’s future grain imports later this summer if the South American country’s export paces eat into domestic supplies. Potential import volumes will largely rely on the fate of Brazil’s safrinha corn crop, which was planted after the optimal yield window due to excessive rains during the soybean harvest.

The safrinha tends to be the largest of Brazil’s three corn crops and is typically earmarked for export buyers. But as corn usage for ethanol continues to expand in Brazil, the second crop will need to supply at least some of Brazil’s domestic corn usage rates in the near future, otherwise imports from the U.S. could start to accumulate.

Soybeans

Old crop soybean futures prices surged ahead by $0.19-$0.23/bushel this morning on unseasonably strong Chinese export demand for U.S. bean in March. Prospects for Brazilian soy imports from the U.S. also increased overnight, adding strength to the U.S. soy complex. New crop futures clawed out a $0.10-$0.15/bushel gain on planting delays in the Midwest.

A stronger crude oil complex lifted global vegetable oil prices overnight, with lower than expected Malaysian palm oil exports also helping to reverse soyoil’s losses from yesterday morning.

U.S. soybean exporters capitalized on Brazilian shipping delays this spring, new data from China’s General Administration of Custom shows. China imported over four times as many soybeans from the U.S. in March 2021 compared to a year prior, for a total of 263.8 million bushels.

Imports from the U.S. accounted for 92% of China’s 285.5 million bushels of soybeans brought into the country in March 2021. China only bought 11.6 million bushels of soybeans in from Brazil in March. Brazil supplied China with 334.5 million bushels of soybeans in March 2020.

In its first week of soybean planting reporting, USDA found that 3% of expected soybean acres had been planted as of Sunday, confirming analyst expectations and kicking off the reporting season 1% ahead of the five-year average.

Once again, Southern states led the earliest planting gains, with Mississippi (15%), Arkansas (12%), and Louisiana (10%) paving the way. Top producer Illinois is off to a fast start with 5% of expected acres already in the ground. The five-year average for the same reporting period is 1%, suggesting the acreage race to plant soybeans over corn acres may be tighter in the “I” states than previously expected.

Wheat

Temperatures in the Plains fell below freezing overnight as dry conditions persist in the Northern Plains. Despite favorable condition ratings and progress reports from USDA in yesterday’s weekly Crop Progress update, the wheat complex continued $0.04-$0.06/bushel higher this morning. A weaker dollar also helped raise export prospects for wheat in the early morning trading session.

Despite cooler temperatures in the Plains over the past week, the winter wheat crop stood unwavering at 53% good to excellent for the third week in a row. But only 10% of the crop had reached the jointing phase of crop development, down 4% from the previous five-year average and 3% lower than the same reporting period a year ago.

The lack of revised condition ratings for the winter wheat crop took analysts somewhat by surprise, as the average trade guess expected good to excellent ratings to fall by at least 1%. Of course, the likelihood of a downward revisions is increasing as chilly temperatures raise frost concerns for the crop over the next several days.

On a brighter note, USDA’s updated reporting on spring wheat planting progress surged ahead 8% over the past week to 19% complete as of April 18. The five-year average for spring wheat planting completion for the same reporting week stands at 12% and was only 7% complete a year ago.

Across the Northern U.S., planting is ahead of historical paces in every large spring wheat producing state. North Dakota has 13% of expected spring wheat acreage planted already this season. A year ago, farmers in North Dakota hadn’t even started sowing. And in South Dakota, 46% of spring wheat seeds have been sown, compared to a mere 9% the same time last year.

Weather

As mentioned earlier, rain and snow will continue to move through the Northern Plains and Upper Mississippi River Valley today, with the system making its way through the Eastern Corn Belt by tomorrow, according to NOAA’s short-range forecasts. Total accumulation is expected to be light, ranging between one and three inches.

Unseasonably cool temperatures will continue to plague the Heartland in the coming days, with another night of sub-freezing temperatures expected to reach as far south as Northern Texas tonight. Watch for frost reports for the winter wheat crop in the Southern Plains over the next couple days.

Soil moisture conditions improved over the past week, due in large part to rains and snow scattered across the country, as well as cooler temperatures that prevented much of the moisture from evaporating.

As of Sunday, 69% of U.S. cropland reported adequate to surplus topsoil moisture, up 2% from a week ago. Subsoil moisture levels also improved, rising 1% from last week to 65% adequate to surplus.

Financials

Coronavirus cases in the U.S. rose by 68,591 to 31,738,944 cases as of this morning according to the Johns Hopkins Coronavirus Resource Center. The death toll increased by 512 lives to 567,729 deaths as of press time. Despite rising vaccine rates, caseloads remain high even as the end of the pandemic inches a little closer.

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.

U.S. stock indices tumbled overnight as investors questioned whether or not earnings results reported this week justified high equity valuations. “All these company share prices are near or close to record highs and we are seeing a lot of people taking money off the table,” Michael Hewson, chief market analyst at CMC Markets, told the Wall Street Journal this morning. “There is a general lack of impetus.”

Resurging COVID-19 infection rates in other countries, including India, and slowing vaccination rates in the U.S. limited gains in the equity markets this morning. S&P 500 futures fell 0.35% to $4,140.75 at last glance.

Morning Ag Commodity Prices - 4/20/2021
Contract Units High Low Last Net Change % Change
MAY '21 CORN $ / BSH  5.9975 5.9275 5.9775 0.0575 0.97%
JUL '21 CORN $ / BSH  5.88 5.8075 5.855 0.05 0.86%
SEP '21 CORN $ / BSH  5.4325 5.37 5.425 0.05 0.93%
DEC '21 CORN $ / BSH  5.2575 5.1925 5.255 0.0525 1.01%
MAR '22 CORN $ / BSH  5.32 5.2575 5.3175 0.0475 0.90%
MAY '22 CORN $ / BSH  5.355 5.295 5.355 0.05 0.94%
JUL '22 CORN $ / BSH  5.3675 5.31 5.3675 0.0475 0.89%
MAY '21 SOYBEANS $ / BSH  14.7675 14.5 14.7475 0.25 1.72%
JUL '21 SOYBEANS $ / BSH  14.62 14.3575 14.6 0.235 1.64%
AUG '21 SOYBEANS $ / BSH  14.1575 13.9325 14.1425 0.205 1.47%
SEP '21 SOYBEANS $ / BSH  13.385 13.1875 13.385 0.1725 1.31%
NOV '21 SOYBEANS $ / BSH  12.9925 12.805 12.9875 0.1475 1.15%
JAN '22 SOYBEANS $ / BSH  12.97 12.79 12.97 0.1475 1.15%
MAR '22 SOYBEANS $ / BSH  12.65 12.53 12.65 0.1025 0.82%
MAY '22 SOYBEANS $ / BSH  12.5975 12.45 12.5975 0.1225 0.98%
JUL '22 SOYBEANS $ / BSH  12.55 12.5 12.5475 0.095 0.76%
MAY '21 SOYBEAN OIL  $ / LB 58.08 56.22 57.89 1.62 2.88%
JUL '21 SOYBEAN OIL  $ / LB 55.24 53.68 55.03 1.16 2.15%
MAY '21 SOY MEAL $ / TON 413.2 407 412.2 4.7 1.15%
JUL '21 SOY MEAL $ / TON 416.8 410.8 415.8 4.5 1.09%
AUG '21 SOY MEAL $ / TON 412.8 408 412.1 4.1 1.00%
SEP '21 SOY MEAL $ / TON 407.4 402.5 406.6 3.9 0.97%
OCT '21 SOY MEAL $ / TON 399.7 394.8 399.7 3.9 0.99%
MAY '21 Chicago SRW $ / BSH  6.59 6.5025 6.58 0.0575 0.88%
JUL '21 Chicago SRW $ / BSH  6.6025 6.5125 6.5925 0.055 0.84%
SEP '21 Chicago SRW $ / BSH  6.625 6.5375 6.6125 0.05 0.76%
DEC '21 Chicago SRW $ / BSH  6.675 6.595 6.6675 0.05 0.76%
MAR '22 Chicago SRW $ / BSH  6.7275 6.6475 6.7125 0.045 0.67%
MAY '21 Kansas City HRW $ / BSH  6.17 6.0925 6.1575 0.0375 0.61%
JUL '21 Kansas City HRW $ / BSH  6.2375 6.1575 6.2225 0.035 0.57%
SEP '21 Kansas City HRW $ / BSH  6.3 6.23 6.275 0.025 0.40%
DEC '21 Kansas City HRW $ / BSH  6.38 6.325 6.375 0.035 0.55%
MAR '22 Kansas City HRW $ / BSH  6.4625 6.405 6.4625 0.0425 0.66%
MAY '21 MLPS Spring Wheat $ / BSH  6.7025 6.625 6.6825 0.0375 0.56%
JUL '21 MLPS Spring Wheat $ / BSH  6.77 6.695 6.7625 0.0475 0.71%
SEP '21 MLPS Spring Wheat $ / BSH  6.8225 6.75 6.8225 0.0575 0.85%
DEC '21 MLPS Spring Wheat $ / BSH  6.88 6.825 6.88 0.0575 0.84%
MAR '22 MLPS Spring Wheat $ / BSH  6.865 6.865 6.865 0 0.00%
JUN '21 ICE Dollar Index $ 91.09 90.84 91.01 -0.04 -0.04%
 MA '21 Light Crude $ / BBL  64.25 63.4 63.55 0.17 0.27%
 JU '21 Light Crude $ / BBL  64.38 63.38 63.69 0.26 0.41%
MAY '21 ULS Diesel $ /U GAL 1.9155 1.8901 1.8938 0.0013 0.07%
JUN '21 ULS Diesel $ /U GAL 1.9174 1.8926 1.8975 0.0028 0.15%
MAY '21 Gasoline $ /U GAL 2.072 2.0433 2.0501 0.0056 0.27%
JUN '21 Gasoline $ /U GAL 2.0742 2.0442 2.0529 0.0066 0.32%
APR '21 Feeder Cattle $ / CWT 0 #N/A 137.725 0 0.00%
MAY '21 Feeder Cattle $ / CWT 0 #N/A 142.475 0 0.00%
 AP '21 Live Cattle $ / CWT 0 #N/A 120.35 0 0.00%
 JU '21 Live Cattle $ / CWT 0 #N/A 118.6 0 0.00%
MAY '21 Live Hogs $ / CWT 0 #N/A 105.65 0 0.00%
JUN '21 Live Hogs $ / CWT 0 #N/A 104.325 0 0.00%
APR '21 Class III Milk $ / CWT 17.66 #N/A 17.67 0 0.00%
MAY '21 Class III Milk $ / CWT 19.16 19.05 19.1 -0.06 -0.31%
JUN '21 Class III Milk $ / CWT 18.95 #N/A 19.1 0 0.00%
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