Corn closes limit up, soybeans 25¢ higher | Thursday, April 22, 2021

USDA’s Weekly Export sales were weaker for corn, soybeans.

On Thursday, the CME Group’s farm markets end sharply higher.

At the close, the May corn futures finished at its daily limit up of 25¢ higher at $6.50½.

July corn futures closed limit up 25¢ higher at $6.31¼. New-crop December corn futures closed 16¾¢ higher at $5.53½. December prices have rallied $1.86 off the contract low of $3.57 to the contract high hit overnight at $5.43.
 
May soybean futures settled 36¢ higher at $15.33¼. July soybean futures ended 34½¢ higher at $15.14¾. New-crop November soybean futures closed 28¾¢ higher at $13.38¼.

July wheat futures finished 35½¢ higher at $7.10¼. 

July soymeal futures settled $9.20 short ton higher at $425.30.

July soy oil futures finished 2.01¢ higher at 58.95¢ per pound.

In the outside markets, the NYMEX crude oil market is +0.27 higher (+0.44%) at $61.62. The U.S. dollar is higher, and the Dow Jones Industrials are 259 points lower (-0.76%) at 33,878 points.

Separately, the USDA’s Weekly Export Sales Report Thursday shows weak demand figures for corn.

  • Corn = 417,000 metric tons (mmt.) vs. the trade expectations of 350,000 to 1.1 mmt. 
  • Soybeans = 379,600 mt. vs. the trade’s expectation of 300,000 to 750,000 mt.
  • Wheat = 614,000 mt. vs. the trade’s expectations of 200,000 to 700,000 mmt.
  • Soybean meal = 132,500 mt. vs. the trade’s expectations of 50,000 to 250,000 mt.  

Greg Lumsden, Cargill, agrees that the strong price reaction is the combination of several factors working to fuel the bullish story in grains.
 
“First, continued dryness in South America is causing concern as roughly half of Brazil’s secnd crop will be in a drying trend over the next two weeks. The condition scores and crop expectations are falling as a result. In the U.S., the recent cold snap has caused some concern over wheat production as well as planting progress. While the weather impact should be limited, it is adding to the bullish sentiment,” Lumsden says.  

Lumsden added, “On the demand front, ethanol and exports continue to be very strong, and with slow farmer selling, the futures are working higher to pull supplies. At previous levels, demand was not being rationed, and now it feels like the market is seeking the levels that will slow demand. Lastly, we are seeing technical breakouts which are being fueled by the fund buying, inflationary expectations, and macro tailwinds. All in, it feels like the market will be well supported as we head into the U.S. growing season as more risk premium is being priced into the futures market.”

Bob Linneman, Kluis Advisors, says that the grain bulls continued to push higher on Wednesday as new contract highs were hit in many of the corn and soybean contracts.

“A slow start to planting in the U.S. coupled with less than ideal short-term weather forecasts is forcing traders to at least consider the potential of what could happen to U.S. balance sheets with below-trendline yields. Yes, it is early to be worried about that. However, the balance sheet does not allow for a large margin of error this year. Traders are also watching Brazil's second corn crop and the continued dry pattern. The world balance sheet for corn is likely falling unless weather changes quickly,” Linneman stated in a note to customers.

Linneman added, “The overhead target for December corn sits at $5.50, while the next target for November soybeans is $13.35. At the rate we are moving this week, we could see those levels before Friday. We also don’t want to forget about new-crop prices for 2022 crop. December 2022 corn is trading near $4.85, while November 2022 soybeans are near $11.85.”

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