Wheat, corn and soybeans close lower | Tuesday, March 30, 2021
Wheat futures plunged Tuesday amid improving crop conditions in the U.S. southern Plains and Midwest, while corn and beans dropped ahead of tomorrow’s grain stocks and prospective plantings reports.
In Kansas, the biggest U.S. producer of wheat, 50% of the wheat crop was rated good or excellent as of Sunday, according to the Department of Agriculture. That’s up from 45% a week earlier.
Subsoil moisture was 80% adequate or surplus, and topsoil moisture was 88% adequate or surplus, the USDA said. Those figures are up from 71% and 83% a week earlier, respectively.
As much as an inch of rain fell in parts of Kansas in the past 72 hours, Commodity Weather Group said in a report.
The southern Plains, where hard-red winter varieties are overwintering, likely will see .10 to .5 of precipitation in the next five days, but only over about 10% of growing areas.
In the Midwest and Delta, where soft-red winter wheat is growing, .25 to 1.25 inches of precipitaiton is expected over about 30% of crop areas, CWG said.
Rains likely will be limited in parts of the southern Plains and Midwest in the next week but soil moisture is “adequate,” the forecaster said.
The USDA is scheduled to issue its prospective plantings report tomorrow with analysts polled by Reuters forecasting corn area at 93.2 million acres and soybean area at 90 million acres. Wheat acreage is seen at 45 million, according to the poll.
If realized, the area devoted to corn would be up 2.6% from 2020 and soybean acreage would jump 8.3%. Wheat area would increase by 1.3%.
May wheat futures closed 16¢ lower at $6.00¾ a bushel. Kansas City futures were 12½¢ lower at $5.57 a bushel.
May corn futures finished down 9¢ at $5.37¾. July corn futures were 10¼¢ lower at $5.21 a bushel. New-crop December corn futures were 8¼¢ lower at $4.53 a bushel.
May soybean futures were 25½¢ lower at $13.67½. July soybean futures fell 27¢ to $13.58¼ a bushel. New-crop November soybean futures were 18¢ lower at $11.86½.
May soymeal futures closed up 30¢ to $398.40 a short ton.
May soy oil futures dropped 2.5¢ to 50.46¢ per pound.
In the outside markets, the NYMEX crude oil market is 1.8% lower at $60.47 a barrel. The U.S. dollar is higher, and the Dow Jones Industrials were down about 21 points (-0.06%) at 33,150 points.
On Monday, the CME Group’s farm markets start the week lower.
At the close, the May corn futures closed 5¢ lower at $5.46½. July corn futures finished 4½¢ lower at $5.31¼. New-crop December corn futures closed 5¢ lower at $4.61½.
May soybean futures settled 7½¢ lower at $13.93½. July soybean futures ended 6¢ lower at $13.85½. New-crop November soybean futures finished 2¾¢ lower at $12.04¾.
May wheat futures closed 3½¢ higher at $6.16¾.
May soymeal futures closed $5.90 short term lower at $398.10.
May soy oil futures ended 0.48¢ higher at 52.96¢ per pound.
In the outside markets, the NYMEX crude oil market is +0.48 higher (+0.79%) at $61.45. The U.S. dollar is higher, and the Dow Jones Industrials are 53 points higher (+0.16%) at 33,126 points.
Jason Ward, Northstar Commodity, says that everyone seems to be focused on how many acres we are going to plant, with everyone expecting a record amount of corn/soy acres combined.
“Anything above 180.3 million acres would break the 2017 record, and no one is that low on acres. The interesting part will be the stocks estimates. It’s interesting to note, from the high to the low estimates in the corn category, there is a 407-million-bushel range. This is a substantial difference in corn supplies from high to low of a 1.500-billion-bushel carryout,” Ward says. Meanwhile, the soybean range is also staggering, Ward says.
“The soybean range is 385 million bushels from low to high. The lowest estimate is 100 mil/bu lower than the average and the high side is 285 million bushels more. Think about that: A carryout in the U.S. forecast by USDA to be 120 million bushels, and we have trade estimates 100 mil/bu lower and 285 mil/bu higher. You can see why soybeans have been under some pressure over the past week, as traders assess the risk of a stocks report that could show significantly higher stocks.”
Ward added, “Believe it or not, the cash market trades stronger in corn than it does in soybeans, but it is soybeans that continue to get all the fanfare about record-tight U.S. supplies from a stocks/use standpoint. Basis has narrowed considerably on both, but over the past month it has been the corn that has firmed the most.”
Al Kluis, Kluis Advisors, says that the markets are telling farmers that supplies are tight.
“The way the bull spreads are working in the corn market is positive for the corn market and shows how tight the stocks are in the corn market right now,” Kluis stated in a daily note to customers.
Kluis added, “I am watching the U.S. and global wheat markets. If wheat prices continue to move lower, then it will be difficult for the corn market to move higher. Some of our traditional corn export customers are buying lower cost feed wheat.”