Bryant Sanderson

Apr 14, 2021

Highlights

Grain and oilseed futures rallied today on strong demand and forecasts that are cold enough to draw concerns about planting delays and damage to wheat.

  • EIA reported weekly gasoline demand was up 162k barrels/day to a 33-week high of 8.944 million bpd. U.S. oil refiners are running at 85% capacity, highest since the pandemic started.
  • China’s aluminum futures hit their highest level in a decade, due to possible production restrictions.
  • Outside markets as of 3:05 PM Central: May crude oil at $62.91 up $2.73; U.S. Dollar index at 91.655 down 0.197; Gold at $1737.0 down $10.6; Dow at 33655 up 86.00 points.

 Corn

Corn futures soared higher, with May nearly hitting $6/bu at its highest since July 2013. Basis levels are implying big demand for immediate supplies.

  • Brazil’s safrinha corn production areas have rain and cooler temps in the 10-day forecast starting at the end of this week.
  • Ethanol production fell 34,000 barrels/day this week to 941,000 bpd. Inventories dropped 100,000 to 20.5 million barrels. Ethanol margins are at 10 cents, up 2 cents from last week.
  • Weekly corn export sales estimates are 500k-900k MT old crop and 0-300k MT new crop.
  • Spreads: K21/N21 14’4 inverse, N21/Z21 68’2, Z21/H22 6’6 carry.

 Oilseeds 

Soybean futures also got in on the demand driven rally, breaking out of their down trend but still in the middle of the range we’ve traded since late February. Basis is screaming higher in the East for April-June delivery. 

  • Weekly soybean export sales estimates are -100k MT-200k MT old crop and 0-500k MT new crop. Soymeal estimates are 75k-250k MT old crop and 0-50k MT new crop, and soyoil 5k-30k MT.
  • There was talk today that Pakistan bought 6 cargos of U.S. beans out of the Gulf.
  • NOPA will release March crush data tomorrow at 11am CT. Average trade estimate is 179.179 million bushels.
  • Spreads: K21/N21 8’4 inverse, N21/X21 138’4 inverse, X21/F22 0’6 inverse.

 Wheat

Funds piled into wheat as we added concern about a cold snap to the dryness concerns. Demand also appears to be picking up. 

  • There were rumors in the market that China bought 3-5 cargos of HRW and SWW earlier this week and 8-10 cargos of French wheat today.
  • Weekly wheat export sales estimates are 50k-200k MT old crop and 300k-550k MT new crop.
  • Spreads: Chicago K21/N21 2’2 carry, KC K21/N21 7’6 carry, Minneapolis K21/N21 8’0 carry.