3 Big Things Today, April 7, 2021

Soybeans, Corn Higher Overnight; Brazil Bean Output Forecasts Get a Boost.

1. Soybean and Corn Futures Higher in Overnight Trading

Soybeans and corn were higher overnight while wheat futures were little changed.

Traders seem to be more interested in last week’s planting intentions report than improved forecasts for soybean production in Brazil.

The U.S. Department of Agriculture said in a report last week that it expects growers to plant 87.6 million acres of soybeans this year.

If realized, that would be down from the prior projection and average analyst forecast, both of which pegged planting at 90 million acres.

Corn area was seen by the USDA at 91.1 million acres, the agency said, down from the prior forecast for 92 million acres and well below expectations for 93.2 million acres.

Agroconsult and the USDA’s Foreign Agricultural Service, meanwhile, both said they expect record production from Brazil.

Still, strong prospects for demand and lower-than-expected planted area are underpinning prices.

Soybean futures for May delivery rose 4½¢ to $14.23¼ a bushel overnight on the Chicago Board of Trade. Soymeal gained $1.60 to $408 a short ton, and soy oil gained 0.1¢ to 54.02¢ a pound.

Corn futures for May delivery gained 3½¢ to $5.57¾ a bushel.

Wheat futures for May delivery rose ¼¢ to $6.15¾ a bushel overnight, while Kansas City futures gained 3½¢ to $5.59 a bushel.

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2. Brazil Soybean Output Likely to Jump to a Record, Agroconsult and USDA Say

Brazil’s soybean crop may hit a record and be better than previously expected, according to Agroconsult.

The agribusiness consultancy said in a report yesterday that it now expects output at 137.1 million metric tons.

That’s up from the previous forecast for 132.4 million tons. If realized that would be an 8.5% increase from last year, Agroconsult said.

The U.S. Agriculture Department’s Foreign Agricultural Service said last week that it expects soybean production in Brazil this year at around 141 million metric tons.

“Soybean expansion is forecast on current market conditions and trends including strong demand, high prices, and a favorable exchange rate,” the USDA said in its report. “All these conditions are expected to persist well into the 2021/22 season.”

Exports of the oilseed are now pegged by the FAS at 85 million metric tons this year and 87 million metric tons next year, both records if realized.

Harvest of the crop was delayed due to excessive rainfall earlier this year, which helped demand for U.S. supplies, Commerzbank’s Michaela Helbing-Kuhl said in a note to clients.

The delays also may have led to a decline in Chinese soybean inventories. Inventories dropped to a 10-month low of 4.7 million metric tons, Commerzbank said, citing data from the National Grain and Oil Information Center.

“The delays to delivery are not solely responsible for this, however, the high domestic demand in view of attractive processing margins also did its bit,” Helbing-Kuhl said in the report. “Given the low inventory levels, demand will now have to step on the brake, too. Harvest of the Brazilian crop has caught up on some of the delays as of late.”

About 78% of Brazil’s soybean crop had been harvested as of last Thursday, down from 83% at the same point last year, AgRural said this week.

The South American country’s second corn crop, meanwhile, will drop by about 3.6% this year. Corn production will decline as producers were unable to get their crops in the ground on time due to delays with the soybean harvest, Agroconsult said.

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3. High Winds Forecast For Southern Plains While Parts of Nebraska Face Dry Weather

High-wind warnings and wind advisories have been issued in parts of the southern Plains where hard-red winter wheat is starting to emerge from the ground.

Winds in parts of southwestern Kansas and the Oklahoma and Texas panhandles are expected to be sustained from 30 to 40 mph today with gusts of up to 65 mph, the National Weather Service said in a report early this morning.

“Damaging winds could blow down trees and power lines,” the NWS said. “Widespread power outages are possible. Travel will be difficult, especially for high-profile and lightweight vehicles traveling on east-to-west highways.”

Farther north in much of central Nebraska, a fire-weather watch is in effect as winds are expected to be sustained from 15 to 25 mph and gusts up to 35 mph.

Relative humidity in the area may fall as low as 12%, the agency said.

“Strong winds combined with low relative humidity may cause new fire starts to rapidly spread and grow,” the NWS said.

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