Corn Futures Rise on Forecasted Drop in Midwest Temperatures
By Kirk Maltais
--Corn for May delivery rose 1.1% to $5.60 1/2 a bushel on the
Chicago Board of Trade on Wednesday, amid expectations that
Midwestern weather may soon turn less hospitable for farmers
planting their crops.
--Wheat for May delivery rose 0.1% to $6.16 1/4 a bushel.
--Soybeans for May delivery fell 0.7% to $14.08 3/4 a
False Spring: Temperatures and weather has been supportive for
U.S. farmers getting out into their fields to begin planting.
However, a cooldown is expected in the Midwest next week, which may
slow farmers in their efforts to get their crops in the soil.
"There is a lot of crowing about warm temps pushing corn planting
in the Midwest... all of that may come to a screeching halt next
week, though, as temperatures are due to fall below normal, and we
may even get a frost over the Ohio River Valley for the middle of
the month," said Charlie Sernatinger of ED&F Man Capital.
Healthy Crops: Although CBOT grains futures finished mostly
higher Wednesday, the latest estimates for next year's Brazilian
corn and soybean crops released by the USDA this morning served as
a source of pressure for futures. For the 2021/22 crop year, the
USDA projects Brazilian soybean production at 141 million metric
tons and corn production at 114 million metric tons - versus
estimates for the current crop year of 134 million tons and 105
million tons, respectively. "There is certainly nothing outlandish
in these numbers, and economically, they should have more than
enough incentive to push production higher," said Dan Hueber of the
Using Up the Reserves: U.S. ethanol inventories fell more than
expected by analysts surveyed by Dow Jones. Ending stocks for
ethanol totaled 20.6 million barrels for the week ended April 2,
according to the EIA, down 500,000 barrels from the previous week's
report. This drop exceeds the expectations of analysts surveyed by
Dow Jones, who had forecast a drop of as much as 400,000 barrels.
Meanwhile, daily production rose 10,000 barrels to 975,000 barrels
a day, the EIA said. The uptick is less than expected by analysts,
who had forecast production to rise by as much as 70,000 barrels a
day this week.
Shipment Slowdown: Grain traders are keeping an eye on lacking
confirmation of new export sales, as China is seen as purchasing
more grains from Brazil. "Significant Chinese buyers for US Ag
products have largely disappeared from the market in recent weeks,"
said Robert Yawger of Mizuho Securities USA. The last confirmation
of a flash export sale from the USDA came on Monday. Grains traders
surveyed by The Wall Street Journal forecast that sales of corn
will total anywhere from 600,000 metric tons to 1.2 million tons,
while soybeans total between 100,000 tons and 550,000 tons.
Watching China: Soyoil futures were a major driver for soybeans
today, with soyoil closing down 2% to 52.85 cents a pound. Soyoil
in particular has been strong due to strong crush demand and low
vegetable oil stocks globally, but traders are watching China for
further indications of direction in the soy complex. "This week
China should start seeing a major increase in the arrivals of
Brazilian soybeans," said Darin Friedrichs of StoneX. "If there's a
big increase in arrivals, but crush doesn't pick up much, it would
signal bad demand."
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
--The USDA will release its monthly supply and demand report at
noon ET Friday.
--The CFTC will release its weekly commitment of traders report
at 3:30 p.m. ET Friday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
April 07, 2021 15:21 ET (19:21 GMT)
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