Ag markets end in the green | Tuesday, March 23, 2021
On Tuesday, the CME Group’s farm markets finish higher.
At the close, the May corn futures closed 2¼¢ higher at $5.51¼. July corn futures finished 2¾¢ higher at $5.34¼. New-crop December corn futures closed 1¾¢ higher at $4.69¾.
May soybean futures are 5¾¢ higher at $14.23. July soybean futures settled 7¼¢ higher at $14.11½. New-crop November soybean futures finished 7½¢ higher at $12.23¼.
May wheat futures closed 7½¢ higher at $6.34¼.
May soymeal futures settled $2.20 short term higher at $398.80.
May soy oil futures closed 0.65¢ higher at 57.02¢ per pound.
In the outside markets, the NYMEX crude oil market is -3.88 lower (-6.30%) at $57.68. The U.S. dollar is higher, and the Dow Jones Industrials are 196 points lower (-0.60%) at 32,534 points.
Jason Ward, Northstar Commodity, says that the grain complex was supported by the continued strength in the cash market and improving margins for soy crushers/livestock.
"I think we backed off the from the best levels of the day because of the energy complex and the uncertainty surrounding COVID-19 in Europe and in South America," Ward says.
Ward added, "I have never seen such a push by the domestic end user, mainly ethanol producers to secure corn for future months. I just jumped off our conference call in the Plains and cash corn is 50¢ over the board. So, north of $6.00 cash to secure it, and customers in Oklahoma are reporting $6.60 cash corn vs $6.40 cash wheat. Our office in Canada is selling cash wheat to feeders instead of corn, so when you get outside the Midwest corn is very expensive. It almost acts stronger in the cash market than the soybeans do which is quite strange, as it is has been well documented how tight soybeans are on a stocks/use basis."
There are reports of good yields out of Brazil, in the South especially, Ward says.
"In the state of Mato Gross, itself, I hear some disappointment, but the trade I think is getting a little more comfortable with USDA’s 134 million metric tons estimate, some local Brazilian estimates are higher," Ward says.
Ward says that as spring planting season approaches more U.S. producers could be leaning toward corn over soybeans due to insurance guarantees.
"And, our customers in the Dakotas are leaning corn vs spring wheat. Spring wheat seems to be the loser from an acreage stand point, due to a poor guarantee. This makes me very quietly bullish spring wheat because we need those acres too, and I think corn/soy just beats it," Ward says.
Al Kluis, Kluis Advisors, says that investors will be watching planting weather closely, as April approaches.
“I am watching the extended forecasts for the southern Plains. Two cold fronts there later this week will bring in more rain and continue to delay planting. Corn needs to get planted in March to get maximum corn yields in much of the Delta and mid-South. That is looking less likely all the time.”
Kluis added, “The April USDA supply/demand report will need to again raise corn export projections. China bought another 150 million bushels of corn last week. Total exports to China are understated, even if no additional purchases are announced over the next three weeks.”