Midday Comments: 3/22/2021

Corn was pressured by fund liquidation on Monday, but soybeans & wheat have traded mixed. Corn struggled overnight after Friday’s CFTC Commitments of Traders data indicated managed trading funds added to their overall net long position in corn (370,900 contracts, up 14,386 contracts) in the weekly period ended March 16, but whittled down their net longs in all the other grains.  That left corn vulnerable to some long corn/short other grains spread positions ahead of the March 31 Prospective Planting & Grain Stocks reports.  Traders were also wary after the Thursday-Friday talks between the US & China were contentious.  While China still has big agricultural purchase commitments to fulfill in 2021, their recent huge corn sales still have to be shipped.  Although there have been no indications that China will walk away from huge unshipped purchases, traders can’t be faulted for being nervous about that possibility. Soybeans & wheat traded narrowly mixed on Monday morning as weekly grain export inspections were solid for all grains expect grain sorghum. In particular, old-crop soybeans gained strength as the regular trading session evolved.  At the 7:45 am pause in electronic trading, May corn futures were down 2.5c,  Dec. corn was 1.75c lower, May beans were 1.25c higher, Nov. beans was 1/2c lower, May soymeal was down $2.00/ton, May soyoil was 0.52c/lb. higher & May & July SRW wheat were each down 2.5c.  At 1:05 pm, May corn futures were down 6.5c, July corn was 5c lower, Dec. corn was down 3.25c, May beans were up 6c, July beans were 4.75c higher, Nov. beans were down 3/4c, May soymeal was $10.00/ton lower, May soyoil was up 2.50c/lb., May SRW wheat was 1/4c higher & July SRW wheat was unchanged.
 
Recapping Friday’s price action, corn & soybeans recovered most of Thursday’s losses on Friday as interest rates & crude oil stabilized & USDA announced a 31.495 mb old-crop corn sale to China, bringing the week’s corn sales to that nation to 152.590 mb.  Even before this weeks’ massive new sales to China, cumulative 2020/21 export commitments were record-high by 356.8 mb.  Assuming that this week’s  new sales were not switched from previously announced unknown destinations sales, next week’s weekly export sales report will have about 100 mb more corn export sales on the books for 2020/21 at week #29 that were previously shipped in **any** full year ever!   Wheat futures faltered on Friday as prospects for strong wheat output in the Northern Hemisphere limited buying interest. Thursday’s risk-off selling activity moderated as bottom-pickers emerged in most equity & commodity markets.  With EU regulators reasserting the safety of the COVID vaccine produced by AstraZeneca, traders bet that the EU would ramp up its vaccination efforts & turn their economic spigot back on. At Friday’s close, May corn futures jumped 11.25c, July corn gained 8.5c, Dec. corn rose 3.5c, May beans soared 24c higher, July beans surged up 22.5c, Nov. beans rallied 13.75c, May soymeal blasted $9.70/ton higher, May soyoil was up 0.35c/lb., May soft red winter wheat dropped 3.5c & July SRW wheat lost 2.75c.  For the week, continuation charts of corn gained 8.5c, soybeans edged 1/2c higher & SRW wheat declined 4.75c. 
 
In export news, USDA did not report any daily export sales on Monday.
 
While slightly below the previous week’s huge totals, grain inspections for the week ended March 18 were still quite large & above the weekly pace needed for all grains except grain sorghum. Corn inspections eased to a still very strong 77.245 mb, down from the previous week’s upwardly adjusted 89..541 mb (+2.775 mb), but still the third-largest weekly shipment & highest same-week inspections since at least 2003. Weekly corn inspections need to average 52.8 mb for US corn exports to reach USDA’s 2020/21 export projection of 2,600 mb.  Cumulative corn inspections now total 1,259.3 mb, the fastest export pace since 2008/09’s 1,428.9 mb pace at marketing week #29.  Soybeans inspections fell to 17.983 mb, down from the previous week’s upwardly revised 20.170 mb (+1.108 mb).  While last week’s soybean inspections were the lowest since July 16 & the smallest same-week inspections since 2004, they were still nearly three times the weekly average needed to reach USDA’s export forecast of 2,250 mb. Cumulative soybean inspections have reached 1,970.9 mb, 288.1 mb above the previous record pace of 2016/17.  Milo inspections slipped to a 5-week-low 2.803 mb, down from the previous week’s upwardly adjusted 11.210 mb (+2.014 mb) & below the 5.0 mb needed weekly to reach USDA’s export target of 295 mb. Cumulative milo inspections now total 162.6 mb, the best pace since 2015/16. Wheat inspections also eased from the previous week to 23.828 mb.  That was down from the previous week’s upwardly revised 26.167 mb (+1.053 mb), but still the second-highest weekly total since Oct. 1 & 1.2 times the 20.6 mb needed weekly to reach USDA’s 985 mb export forecast.  Cumulative 2020/21 wheat inspections now total 733.2 mb, down 5.2 mb from last year.  Wheat inspections have improved during the past several weeks, but that elevated pace is needed to reach the export projection USDA currently sees. China was again a very strong influence last week.  They were the top destination for milo (2.799 mb), the second-largest corn destination (16.441 mb), the fourth- largest wheat shipper (2.580 mb), but only the eighth-best destination (0.282 mb) for soybeans. 
 
Locally, corn, soybean & wheat basis levels were all steady on Friday.  For the week, cash prices for nearby delivery surged 21c higher on corn, were unchanged on soybeans & declined 12c on wheat.  St. Louis terminal cash corn prices equaled their market year closing high of $6.02 on Friday.
 
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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.