Nick Paumen

Apr 29, 2021

Highlights

Today seemed to be a quiet day of trade in both the ag and macro sectors. The fund driven rally remains paused in corn, beans, and wheat so we trade weather and the planting pace. The macro sector is finding strength on hopes that we are reopening for business as usual coming out of the pandemic. New York City announced today they plan to fully reopen on July 1st. Jobless claims fell to a new low today as well.

  • This weeks USDA Grain Transportation report indicated that Argentina, Brazil, and Paraguay are seeing their drought conditions pull river water levels down. This forces them to have lighter barge loads and slowing the flow of corn, soybeans, meal, and soybean oil.
  • Drought maps today put 22% of the corn regions experiencing drought, 19% of soybean regions, 82% of HRS regions, and 39% of HRW regions.
  • At 3:00, the DJIA is up a strong 248 at 33972 and S&P up 30.25 at 4206.
  • Crude trading up $1.11 at $64.96.
  • The U.S. $ up .022 at 90.615.

Corn

Not a ton for excitement in the corn market today, wheat perhaps lent some support to take the edge off the downside. Futures are up against a strong planting pace/nice weather in the U.S. and chances for rains in the safrinha crop regions. Although some updates to their forecasts this afternoon show the 10-14 day back to being drier and limited rains are expected. Cash markets remain strong and farmer selling is limited, more focus now on getting the crop in the ground.

  • Funds bought an estimated 3,000 contracts.
  • Long-term summer forecasts are steady at showing we are expected to see above-average temperatures across the entire country through the growing season.
  • Export sales for the old crop were within estimates but on the lower end at 521,300. New crop sales were the highest so far for the new crop season at 553,400 MT.
  • May closed up 15’6 at 702’0, July up 4’2 at 648’2, September down 1’0 at 570’4, and December down 0’2 at 546’2.
  • Spreads: K/N up 11’6 at 54’0 cent inverse, N/U up 6’0 at 78’4 cent inverse, and Z/H up 0’2 at 5’4 cent carry.

Oilseeds

Overall a weaker day in the soybean futures and oil, meal, and board crush saw mostly better trade. Not a ton of fresh news today so we trade lower as the funds take a break from the buying-driven rally. Reuters put out an estimate for the USDA soybean crush report for March that will come out on Monday. Estimates range from 188.0 to 189.2 million bushels, with an average of 188.4 million bushels. If realized, this would be higher than Feb crush at 164.3 but below March 2020 which was at 192.1.

  • Combined soybean export sales were the highest in 11 weeks and we stand at 98.5% of the USDA export total. Strong new crop sales continue to keep the 2021/22 pace above the last handful of years.
  • Funds sold an estimated 8,000 contracts today.
  • May soybean oil down 2.96 at 65.99 cents/lb and July down 1.27 at 59.89 cents/lb, May soybean meal up 1.3 at $422.6/MT and July up 1.2 at $423.0/MT.
  • July board crush up 1’0 at 88.0 cents/bu.
  • May down 15’2 cents at 1542’4, July down 11’4 at 1502’2, August down 12’4 at 1443’2, and November down 9’2 at 1318’6.
  • Spreads: K/N up 1’2 at 45’2 cent inverse, N/Q up 0’4 at 58’4 cent inverse, and X/F down 0’6 at 1’0 inverse.

Wheat

A bit of a bounce-back in the wheat futures as Mpls and Chi futures finish the day higher, KC missed it by a fraction of cent in May and 2 cents in July. The HRS growing region continues to see drought conditions worsen and should support the market.

  • Funds bought an estimated 5,000 contracts today.
  • Old crop sales were strong compared to estimates at 223,600, new crop sales on the lower end of estimates at 237,700 MT.
  • Mpls May up 11’2 at 735’4 and Sept up 11’2 at 750’0, KC May down 0’6 at 688’4 and July down 2’0 at 694’4, and Chi May up 12’2 at 737’4 and July up 6’2 at 729’0.
  • Spreads: Mpls K/N up 0’6 at 7’0 cent carry, KC K/N up 1’2 at 6’0 cent carry, and Chi K/N up 2’4 at a 5’0 cent carry.