THE OPEN

May beans:  1 lower

May meal:  1.40 higher

May soyoil:  35 lower

May corna;  2 1/2 higher

May wheat:  5 1/2 higher

The markets opened as expected with further gains in wheat on short-covering.  Wheat prices corrected sharply after trading above moving averages, and as traders dial back in some weather premium.  Corn and beans continued to see support heading into today's report, with Dec. and May corn setting new contract highs.  Oilshare strengthened from the start of the day as the report was expected to continue to be friendly.

At 11:00 central time, here is what the USDA had to say:

U.S. Stockpiles (million bushels)

2020-21          

                 Estimate    Average       Range       USDA Mar.

Corn             1,352.0        1,346     1,176-1,502    1,502

Soybeans           120.0          119       105-  135      120

Wheat              852.0          849       831-  877      836

World Stockpiles (million metric tons)

2020-21

                       Estimate    Average       Range       USDA Mar.

Corn              283.9      284.9      282.4-286.7     287.7

Soybeans           86.9       83.7       82.7-85.0       83.7

Wheat             295.5      301.7      297.8-303.0     301.2

Brazil Corn, Soybean Production (million metric tons)

2020-21          Estimate    Average       Range       USDA Mar.

Corn              109.0     108.3      105.1-110.0     109.0

Soybeans          136.0     134.4      133.0-137.0     134.0

Argentina Corn, Soybean Production (million metric tons)

                 Estimate    Average       Range       USDA Mar.

Corn               47.0      46.8       45.0-47.5       47.5

Soybeans           47.5      46.8       44.5-47.5       47.5 

Beans:  20/21 production was left unchanged at 4,135 mln bu.  USDA raised exports from 2,250 mln bu to 2.280 mln bu.  Crush was lowered from 2,200 mln bu to 2,190 mln bu.  Result of changes equaled unchanged 20/21 carry-out at 120 mln bu, which is a minimal pipeline amount.   The biggest surprise was the hike in Brazil bean production to 136.0 mmt, vs. an expected 134.4 mmt.

Corn: Higher consumption domestically and abroad resulted in lower corn carry-out, which was anticipated and noted.   20/21 corn outlook is for greater feed and residual use, increased corn for ethanol production, and larger exports. Production was left unchanged at 14,182 mln bu for 20/21, while exports were raised from 2,600 mln to 2,675 mln bu.  Corn -to -ethanol was raised slightly from 4,950 mln bu to 4,975 mln bu.  

Wheat: Production for 20/21 was left unchanged at 1,826 mln bu, while imports were changed from 120 mln bu to 110 mln bu.  Ending stocks were higher at 852 mln bu vs. the expected 836 mln bu. Exports were left unchanged at 985 mln bu.  Feed and residual fell to 100 mln bu from 125 mln bu.  

SOY

• The soy complex traded on a mixed note, with beans in rather listless trade.   May and November bean prices head into the report following weaker meal trade.  Out of the gate rallying soyoil futures set oilshare on a higher path, with July trading up to 38.73% and crush at 57.90c/bu.   Canola prices also rallied setting new contract highs with May at $827.00.  
• Safras&Mercado forecasts 20/21 bean sales at 67.4% of the crop, that is up from 62.7% at the end of March, and vs. 73.9% year ago.  21/22 bean forward sales are 14.2% of the expected harvest.  The soy complex continued to find resistance from falling meal prices, as May breaks key support at $405.00.  Meal spreads continue weak, with the July/Dec inverse falling to $15.70 from $18.00 into the report, while May/July works out to a $3.90 carry as spread volumes continue with the Goldman Roll.   
• Bean spreads into the report continue to show weakness as May contracts are rolled forward.  May/July bean inverse drops to 5c from 6 1/4c into the report, while Jul/Nov bean spreads trades down to 1.33 1/4c from 1.39 1/2c pre-report.  Weakening beans and meal before the report caps off a good soyoil rally, where May finally trades over 54c.  After the report was released prices broke on profit-taking, led by beans and meal.  
• May meal prices test $400.00 again, falling into better consumer pricing ideas, which helps to cushion the break. May beans tests $14.00 post report, with Nov. beans trading down to lows close to $12.60.  Spreads were firmer post report with July/Nov beans trading to 1.40c from 1.32 1/4c inverse, while May/July traded still at 5c inverse.  

GRAINS

• Grains were firm from the start of the day on the back of a further rally in the wheat market.   There continues to be rumors for Chinese wheat and corn business, and worries over current production.  News-wires continue to point to dryness for Brazil's Safrinha crop, without much relief in sight.   
• Dryness in the Northern Plains and into Canada continues to support wheat as well.  Globally there is cold and dry weather in the EU, making the wheat trade a straight up affair out of the lows over the last several weeks.  Into the report Chicago wheat rallies towards $6.50 while KC wheat trades towards the $6.00 benchmark.  
• Corn prices continue to trade higher into the report as funds add to length with little overhead hedge activity to stop it.  Dec. corn posts a new contract high at $4.99 1/2 into the numbers and May corn does the same at $4.85 3/4c.  Spreads were firmer with the July/Dec inverse trading up to 68c from 64 3/4c, while May/July trades to 18 1/2c from 17c.    
• Post report corn prices jumped to new contract highs as global ending stocks and corn carry-out were lowered.  The anticipation of lower ending stocks carried the corn market into a bid into the numbers, with prices placing quick new contract highs afterward.  Wheat prices were lower, but not by much.  Dec corn rallies to a new contract high which is also trendline resistance at $5.03 3/4.

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                                 HI                           LO

May beans: 4 lower                                 14.19                       14.00 3/4

May meal:  2.40 lower                              409.80                     401.50

May soyoil: 9 lower                                   54.14                       52.83

May corn:   4 higher                                  5.95                        5.77   ***new contract high

May wheat: 11 higher                                6.46 1/2                 6.27 1/4

July canola: 8.20 lower                             748.40                    759.20               

OUTSIDE MARKETS

Stocks were marching higher today up 84 pts in the morning session.  Traders continue to book profits on the fan-favorite buy energies/sell US currency trade.  The US dollar trades up to 92.41 while crude oil sinks to $59.10/barrel.

CLOSING COMMENTS

The gist of the report may have been disappointing for the bean bull, but all in all the markets still need to buy acreage and have a nearly ideal growing season.  Corn is the star performer now as farmers try to get it into the field.  

Mini-trends now may continue now given today's stats but believe all the markets must remain well supported on pullbacks:

buy corn/sell beans

buy soyoil/sell meal

Top target highs have been met in corn, with May at $5.95 contract highs and Dec. corn finally trading over $5.00.    Look for corn pullbacks to continue to see buying interest now as funds are long and not wrong.  Bean pullbacks should also stay well supported, though this market is taking a back-seat to corn.  Seasonally, beans often do defer to corn, as corn goes into the ground first and therefore is subjected to weather conditions.  

Since it is the end-of the week, could see some profit-taking and a mid-range close even with these new contract highs.  But today's report did bring corn trading ranges higher by about 10c, while leaving the soy complex range intact.  

Have a good weekend................

 

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America