Closing Comments: 4/15/2021

Soybeans & wheat added to their midweek, post-recoveries, but corn slipped to a mixed close after traders took profits following a overnight rally that briefly took May corn futures above $6.00.  USDA’s Weekly Export Sales report for the week ended April 8 was a muted affair for all but grain sorghum.  Corn sales dropped to a 6-week-low 12.901 mb for 2020/21 with an additional 2.071 mb of new-crop corn reported.  Old-crop soybean sales were just 0.492 mb for 2020/21 with an additional 9.755 mb of 2021/22 beans booked. Old-crop wheat suffered a net 2.083 mb cancellation last week, but 10.082 mb of new-crop wheat were sold.  By contrast, old-crop grain sorghum sales were the highest in at least 3 decades & new-crop milo sales were also aggressive.  Fueled by Chinese buying, 25.853 mb of old- & 7.913 mb of 2021/22 grain sorghum were booked last week.  Cumulative sales of corn (2,630.2 mb, 504.5 mb above 2007/08) & soybeans (2.232.6 mb, 193.7 mb above 2016/17) remain at a record- high pace & 2020/21 milo sales (277.3 mb) are the best since 2014/15.  But wheat sales (923.3 mb) have fallen 3.4 mb behind last year when final exports were 965 mb.  USDA maintained its 2020/21 wheat export forecast at 985 mb last Friday.  Traders also shrugged off a report from the National Oilseed Processors that indicated its members crushed 177.984 mb of soybeans in March. That was about 1 mb less than the pre-report average guess & 3.390 mb below last year. The fact that Sept-March NOPA crush stands at a record-high 1,228.709 mb, 36.423 mb (+3.05%) above last year’s previous record, tempered reaction to the data.  USDA forecast 2020/21 crush would only be 25 mb (+1.15%) above last year last Friday.   At Thursday’s close, May corn futures retraced 4c lower, July corn lost 2.75c, Dec. corn were 1c higher, May beans gained 8.25c, July beans rallied 8.75c, Nov. beans rose 5c, May soymeal jumped up $3.70/ton, May soyoil bounced 0.65c/lb. higher, May SRW wheat rebounded 5.75c & July SRW wheat was 5.25c higher.
 
Recapping Wednesday’s price activity, weather worries & rising Brazilian soybean basis levels combined to unleash fresh buying in the grain complex, sending markets surging higher.  Weather forecasts warned of snow & cold temperatures in the far western Plains while two-week projections blanketed most of the US growing region with below-normal temperatures.  Traders took heed & bid up wheat futures, noting recent winter wheat crop conditions were just 53% good-excellent, down from last year’s 62% rating.  Old-crop corn futures soared higher as speculators bet that the Brazilian Safrinha corn crop would not live up to record expectations.  End-users scrambled to secure supplies ahead of an eventual return of farmers to the field & the potential for less summer export competitions than earlier expected.  Traders largely shrugged off 3-week-low ethanol production data since ethanol stockpiles declined for the third straight week to their lowest level since Nov. 13. Soybeans rocketed higher as Brazilian prices pared their discount to US soybeans & their harvest neared completion.  At Wednesday’s close, May corn futures jumped up 14c, July corn rallied 13c, Dec. corn rose 7c, May beans soared 20.5c higher, July beans surged up 17.5c, Nov. beans were up 12.5c, May soymeal were up $3.20/ton, May soyoil charged 1.21c/lb. higher, May soft red winter wheat soared 18.25c & July SRW wheat raced 16.75c higher.  
 
In export news, USDA did not report any daily export sales on either Wednesday or Thursday.  Japan’s ag ministry purchased a total of 3.313 mb of milling wheat from the US & Canada on Thursday, & Algeria booked 7.349 mb of durum wheat today with Canada winning some of the business.  South Korean feed mills bought 2.559 mb of US corn for June arrival. 
 
This morning’s USDA Weekly Export Sales report fell at the lower end of trade expectations in part because Chinese buyers were largely on hiatus last week. China canceled old-crop corn (-0.933 mb) & soybeans (-2.021 mb), & new-crop wheat (-4.777 mb), & was a minimal buyer of old-crop wheat (0.114mb). China also pared back its weekly purchases of cotton (8,700 running bales, just 3.9% of total weekly sales), of pork (100 mt, 0.6% of the total), beef (3,300 mt, 21.0% the total) & cattle hides (164,600, 58.2% of total weekly sales). Chinese purchases of grain sorghum were the notable exception. China bought 23.688 mb of 2020/21 milo last week, bringing cumulative 2020/21 milo commitments to 246.158 mb.  Cumulative 2020/21 exports commitments to China now stand at 915.721 mb on corn, 1311.754 mb on soybeans, & 117.701 mb on wheat. Livestock traders were particularly disappointed by the weekly results, sending summer lean hog futures down the $3.00/cwt limit & cattle futures down 40-50c/cwt.
 
Locally, corn basis was down 5c, but soybean & wheat basis levels were steady on Wednesday. On Thursday, corn & wheat basis were steady, but bean basis improved 4c.
 
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"Top Ag Comments" are written by David Marshall, AgTraderTalk LLC, Nashville, IL.  To learn more about his farm marketing advisory or commodity brokerage services, contact him at dmarshall@agtradertalk.com or call (618) 327-4370 (voice/fax) or (618) 314-0918 (cell). This commentary is not intended for specific trading strategies. We strive to insure this information is reliable, but we cannot guarantee its accuracy or completeness.  Commodity trading involves risks. You should fully understand those risks before trading.