Patti Uhrich

May 12, 2021

Highlights

The May USDA report was released at 11:00 a.m. The markets responded with corn going lower, beans remaining higher and wheat moving lower.

 

  • USDA announced a sale of 100,000 mt of corn to Mexico this morning.  Of the total, 30,000 mt is for delivery during the 2020/2021 marketing year and 70,000 mt is for delivery during the 2021/2022 marketing year.
  • The Dow was sharply lower today, down 651.61 pts as of 2:55 p.m.
  • The energy markets were higher with crude oil up $0.44 at $66.05/barrel.
  • Weekly ethanol production was higher at 979,000 bpd – a 22 week high with net margins at 25 cents/gallon.
  • US$ higher at 90.696, S&P futures are 70 pts lower at 4,076.25 pts, gold is $15.00 lower at $1,821.10 per ounce, and lumber slightly lower at $1570.

Corn

The corn market closed lower on the increase in carryout for new crop corn in the USDA report.  

  • In the USDA report, the 2020/2021 corn ending stocks number was neutral at 1.257 billion bushels and the world stocks at 283.5 mmt is neutral/slightly bearish.
  • In the old crop corn the USDA increased exports by 100 mil bu and food, seed and industrial use down 5 mil bu to 6395 mil bu.
  • USDA lowered their estimate for Brazil’s corn production by 7.0 mmt to 102.0 mmt.  Argentine corn production was left at 47 mmt.
  • The new crop corn numbers were bearish with the ending stocks at 1.507 billion bushels.  This is figuring a 179.5 bu/acre average for the U.S, the highest yield on record by 3 bushels per acre.  
  • In the new crop the USDA increased ethanol bushels and cut the export demand.
  • 2021/2022 world carryout for corn is projected to increase 8.8 mmt to 292.3 mmt on the increase in US and Brazil’s carryout.
  • Closes: July at $7.14 ¾, down 7 ½ cents, December at $5.93, down 18 ¼ cents.
  • Spreads: K/N 42 ¾ inverse, N/U 93 ¼ inverse, U/Z 28 ½ inverse, Z/H 5 carry.

Oilseeds

The soybeans market continued higher on the neutral USDA report.

 

  • USDA made no changes in their 2020/2021 soybean balance sheet with the carryout remaining at 120 mil bu, in line with expectations.
  • China’s soybean imports were unchanged at 100.0 mmt.
  • The 2021/2022 soybean production was estimated at 4.405 mil bushels using a yield of 50.8 bu/acre. 
  • China’s soybean imports for 2021/2022 was raised to 103.0 mmt.
  • The carryout for soybeans in 2021/2022 was estimated at 140 mil bu. slightly above expectations.
  • Brazil’s soybean production was unchanged at 136 mmt and Argentine soybean production was lower at 47 mmt.
  • 2021/2022 world soybean carryout is at 91.1 mmt, up 4.55 mmt from last year and slightly above expectations.
  • Closes: July at $16.42 ½ up 27 ¾ cents, November at $14.43 ¾ , up 12 ¼ cents.
  • New contract highs in soyoil and meal today with meal up $1.00 and oil up 160 points.
  • Spreads: K/N 18 inverse, N/Q 70 inverse, N/X 198 ¾ inverse, X/F 3 ½ inverse.

Wheat

The wheat markets were lower overnight and that carried through the day trade on higher carryouts in the USDA report.  There has been rain in the southern plains that added to the pressure on wheat.

 

  • The USDA report lowered old crop wheat exports by 20 mil bu to 965 mil bu and lowered food use by 5 mil bu to 960 mil bu which resulted in a 20 mil bu increase in old crop wheat carryout to 872 mil. bu. This was 22 mil bu above expectations.
  • The US old crop HRW carryout was estimated at 423 mil bu, HRS at 267, SRW at 102, White at 53 and Durum at 26.
  • 2020/2021 world wheat carryout was unchanged at 294.7 mmt.
  • For the 2021/2022 wheat crop - carryout was estimated at 774 mil bu with disappearance at 2095 mil bu vs. 2088 mil bu for 2020/2021.
  • 2021/2022 world wheat carryout at 294.9 mmt is almost unchand from 294.7 mmt last year.  China’s wheat carryout is expected to decline from 145.4 mmt to 142.4 mmt.
  • Declining US wheat carryout stocks is supportive for the market but world wheat carryout stocks remain large.
  • July closes: Mpls at $7.65 ½, down 5 cents, KC at $6.90 ¾, down 19 ¾ cents, Chicago at $7.29 ¾ , down 12 cents.
  • Spreads: Mpls K/N 17 ½ carry, Kansa City K/N 8 carry, Chicago K/N 25 inverse.