Soybean complex takes the lead role Friday

USDA’s Weekly Export Sales Report is price-friendly.

On Friday, the CME Group’s farm markets end mixed.

At the close, the March corn futures finished 7½¢ lower at $5.42¼. May corn futures settled 7¼¢ lower at $5.41½. New-crop December corn futures closed ¾¢ higher at $4.60. 
 
March soybean futures finished 2¼¢ higher at $13.77. May soybean futures finished 3½¢ higher at $13.80. New-crop November soybean futures closed 9¾¢ higher at $11.96½.

May wheat futures finished 9¾¢ lower at $6.55¾. 

May soymeal futures closed $1.40 short term lower at $423.60.

May soy oil futures settled 0.64 higher at 46.89¢ per pound.

In the outside markets, the NYMEX crude oil market is $1.55 per barrel lower (-2.56%) at $58.97. The U.S. dollar is lower, and the Dow Jones Industrials are 26 points higher (+0.08%) at 31,519 points.

Britt O’Connell, ever.ag, says that today brought some very interesting spread trading to the grain markets.  

“Yesterday the USDA held its annual Ag Outlook Forum and with that a swing at how the 2021 balance sheet could play out. It is important to remember that the Outlook Forum is not an official USDA estimate, it carries a very forward looking economic view rather than our March 31 planting intentions, which will include farmer-survey and boots-on-the-ground data. Planted acres were pegged at 92 and 90 million acres respectively for corn and soybeans. Yield estimates used are very vanilla – trendline with demand in both corn and soybeans having a very strong showing, particularly in the exports category,” O’Connell says.

She added, “Apparently, the USDA believes that China’s corn purchases are here for at least another year. Who am I to say they aren’t right. The big takeaway for me is that the balance sheet appears it will remain tight with little to no room for error in yield. Soybeans need every bit of the 4.525 billion bushels of production to simply tread water and told at today’s pipeline levels. Will corn work itself ahead of corn and ensure itself these acres? Today the ratio has remained firmly planted at a neutral 2.5:1. There was no bearish news for new crop, but with today being first notice day and option expiration, things tend to get a little sloppy,” O’Connell says.

Separately, the USDA’s Weekly Export Sales Report Friday shows very strong demand figures for corn and soybeans. Here are the totals:

  • Corn = 1.17 million metric tons (mmt.) vs. the trade expectations of 800,000 to 1.5 mmt. 
  • Soybeans = 623,900 mmt. vs. the trade’s expectations of 350,000 to 1.2 mmt.
  • Wheat = 613,500 mt. 
  • Soybean meal = 322,200 mt.

Bob Linneman, Kluis Advisors, says that CBOT wheat prices have bounced nearly 38¢ from last week’s low to the high yesterday.  

“Winter wheat traders are not used to evaluating subzero temperatures. Spring wheat prices should be watched closely in coming weeks. Many traders are expecting spring wheat acres to switch in favor of corn or soybeans based on current prices. What price will spring wheat need to reach to retain acres,” Linneman stated in a daily note to customers.

Linneman added, “Crude oil prices hit $62.29 yesterday and are now trading $59.29 today. Prices have been nearly straight up since February 1, so a correction is overdue. $58.25 is the first Fibonacci retracement target, followed by $57.00.”

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