Ami Heesch

Apr 5, 2021

By Kevin Stockard

 

Highlights                                           

  • Janet Yellen will argue for a global minimum corporate tax rate. This would discourage companies from relocating, as President Biden is set to raise the U.S. corporate tax rate from 21% to 28%.
  • The S&P 500 is up 0.5% and the DOW hit a record high after the March jobs report showed 916,000 jobs added, most since August. Traders are expecting more data this week that will confirm the recovery in services.
  • Crude oil is down sharply after OPEC agreed to boost production from May to July. Iran’s oil production was up 210,000 barrels per day in March to 2.3 million bpd.
  • India topped 100,000 Covid-19 cases for the first time. About 165 million doses of the Covid-19 vaccine have been administered in the U.S., according to the CDC
  • As of 7:00 am CT, crude oil is down 1.72 at $59.73/barrel, gold is down 2.3 at $1,726.10, DOW up 214 to 33,251, dollar index is down 45, and Euro is down 5 pts.

Corn 

  • The 6-10 day forecast is slightly wetter for the Eastern Corn Belt, while the 11-15 day looks much drier which should help corn planting.
  • Brazil saw some scattered weekend rains, including Mato Grosso and Goias. The 7-10 day forecast shows good rains for northern Brazil’s safrinha corn crop, while southern Brazil areas of Mato Grosso, Sao Paulo, and Parana remain dry.
  • A private analyst lowered their safrinha corn crop estimate from 81.3 MMT to 77.65 MMT.
  • In the week ending 3/30/21, funds were net buyers of 7,409 corn contracts and are now net long 395,584 contracts. Traders had expected funds to be sellers of corn heading into last week’s USDA reports. 

Outlook:  May futures down 2 ½ to up 1 ¼ overnight.. new crop continues to gain on old, as traders focus on acreage.

 

Oilseeds 

  • The CME raised maintenance margin on soybean futures from $3,000 to $3,350 per contract starting in May.
  • A private analyst raised their Brazil soybean crop estimate from 133.47 to 134 MMT.
  • Thursday night, China’s Dalian No 1 soybeans were down 22 ½, soymeal down 1.10, and soyoil up 86. Chinese markets are now on holiday. Malaysian palm futures were up just 2 ringgits.
  • Funds were net sellers of 20,973 soybean contracts and are now net long 141,880 contracts. They were buyers of 615 soymeal, now net long 58,235, and sellers of 13,137 soy oil, now net long 80,840 contracts.

Outlook:  May beans up 14 ¾ to up 9 ¾ overnight..  gapped higher following the holiday weekend, as stocks are very tight and more soybean acres are needed. The whole soy complex is getting in on the rally this morning.

 

Wheat 

  • Egypt’s GASC issued a wheat tender for August 1-10 shipment, with results on Tuesday. Russia’s new wheat export tax goes into effect June 2. Egypt supply minister says their strategic reserves are at 3.6 months of consumption.
  • Saudi Arabia bought 295,000 MT of wheat for June arrival at $271.05/MT.
  • SovEcon lowered their Russian wheat outlook from 39.1 MMT to 38.9 MMT.
  • Funds were net sellers of 22,871 Chicago wheat (now net short 14,711 contracts), sellers of 4,520 KC wheat (now net long 21,722 contracts), and sellers of 4,840 Minneapolis wheat (now net long 10,384). 

Outlook:  May KC wheat down 1 ¼ to up 1 ¾ overnight..  no acreage story to boost wheat. There is a pickup in export activity, although it looks to be Russia/Black Sea origin.