Market News

Corn notches new round of highs

Soybeans were higher on commercial and technical buying, with deferred months outgaining nearby contracts. Beans continued to see support from tight supplies and strong global demand for vegetable oils. The strength in deferred months can be tied to the trade trying to increase domestic acreage. Domestic demand for beans remains solid, offsetting some of the pressure from Brazil taking over the lead in exports. Parts of the Midwest and Plains will see near-term planting delays, but the precipitation will be long-term beneficial. Low water levels on a key river in Argentina are reportedly slowing down exports and raising costs. There’s been no correlated bump in U.S. soybean product exports yet, but that could occur in the coming weeks. Argentina is the world’s leading exporter of soybean meal and oil. Soybean meal was supported by on commercial buying and bean oil was mostly higher on commercial spread adjustments.

Corn was higher on commercial and technical buying, with a new contract high and close above $7 in July and a fresh contract high in December. Corn is also looking at a tight near-term supply, along with more crop stress in Brazil, while trying to encourage an increase in U.S. planted area, pushing new crop months to double digit gains. Near-term planting delays are probable in parts of the U.S. Mexico and unknown destinations both bought U.S. corn, but there was a cancellation by China. Mexico picked up 184,100 tons for 2021/22 and unknown purchased a total of 147,320 tons, with 45,720 for this marketing year and 101,600 tons for next marketing year, while China canceled on 140,000 tons, all old crop. There was talk during the session, but no confirmation, of China buying new crop U.S. corn. The 2021/22 marketing year for corn starts September 1^st. The USDA’s weekly export numbers are out Thursday at 8:30 AM Eastern/7:30 Central. Ethanol futures were unchanged. The U.S. Energy Information Administration says ethanol production last week averaged 952,000 barrels a day, up 7,000 on the week and 354,000 on the year, but down 84,000 from this stage of 2019. Domestic stocks increased for the first time since mid-March, gaining 704,000 barrels to 20.44 million, which is 5.172 million less than last year and 2.028 million under two years ago.

The wheat complex was higher on commercial and technical buying. Most forecasts have more dry weather in parts of the Plains over the next two weeks. That includes the spring wheat growing areas from the northern U.S. Plains into Canada. Soft red winter conditions generally look good. The complex is also watching signals on livestock feed demand, with wheat replacing corn and soybean meal in some rations. Most of that anecdotal evidence is coming from outside of the U.S., for now, and the USDA did lower its domestic feed wheat use guess in the April supply and demand numbers. The next set of supply and demand estimates is out Wednesday, May 12^th at Noon Eastern/11 Central. The USDA’s attaché in India lowered its 2021/22 wheat production estimate 2 million tons to 105 million on reports of lower than anticipated yields in some areas. 2020/21 production was 107.86 million tons. DTN says the Philippines bought 60,000 tons of wheat, while Thailand is tendering for 455,000 tons of feed wheat and Taiwan is in the market for 89,425 tons of milling wheat.