Soybeans Higher on Unfazed Demand
By Kirk Maltais
-- Soybeans for May delivery rose 1.2% to $14.49 3/4 a bushel on
the Chicago Board of Trade Monday, with near-record highs in prices
failing to derail strong demand for exports.
-- Corn for May delivery rose 1.1% to $5.92 a bushel.
-- Wheat for July delivery fell 0.2% to $6.53 3/4 a bushel.
No Stopping Them: Demand rationing isn't curbing consumption of
U.S. soybeans, meaning supply is expected to grow very thin as the
year progresses, said Tomm Pfitzenmaier of Summit Commodity
"The tight supplies in the U.S. continue and with the harvest
winding down in Brazil, the demand for U.S. soybeans is expected to
remain strong which will continue to drain U.S. soybean supplies,"
said Mr. Pfitzenmaier. "Product availability is setting up to be a
real problem by mid-summer as the U.S. runs low on beans to crush
and we believe that strong commercial demand will ultimately keep
soybeans well supported and force soybean prices higher."
No Rain, No Gain: South American weather was a major source of
support for both corn and soybean futures Monday.
"Today's biggest weather concern is the 2021 Brazilian corn
crop," said AgResource. "The forecasts offer limited rain for the
next two weeks amid near to above-normal temperatures with highs
holding in the 80's to lower 90's."
What happens to the Brazilian corn crop is of great importance
to U.S. farmers, says the firm. "Any loss of the 2021 Brazilian
corn crop will be directed right to the U.S. with nearly a 1:1
relationship in terms of what Brazil does not export from August
into January -- the U.S. will."
More Weather Worries: While Brazilian weather was a main factor
for U.S. grains futures Monday, U.S. weather also played a part,
said Craig Turner of Daniels Trading.
"Dry conditions in the Northern Plains have helped Minneapolis
wheat but there is a lot of corn planted up north too and that is
supportive for old and new crop," said Mr. Turner. "While problems
exist with new crop, old crop will have to rally too ... the market
will need to price ration both crop years to make sure the market
has adequate stocks for the 2021-2022 marketing year."
Trade Questions: The economic conditions for U.S. farmers are
stronger than experts had previously expected, said Tom Halverson,
head of agricultural lender CoBank. Even so, one open question is
how the Biden administration will handle trade relations.
"It's very unclear how trade policy will go moving forward,"
said Mr. Halverson. "What's less clear to me is what they want to
Specifically, how Biden approaches global trade may impact
export sales of U.S. grains, which is of chief importance to the
market, he said.
"What the agricultural sector needs is maximum access to the
most amount of markets throughout the world," said Mr.
Chinese Support: U.S. inspections of corn set to be shipped to
China was a main supporter for corn export inspection figures this
week. In its weekly report the USDA said export inspections of U.S.
corn totaled 1.5 million metric tons for the week ended April 15.
That's down from 1.7 million tons the previous week but well above
the 731,000 tons of corn inspected for export at this time last
China was again the leading destination for U.S. corn for the
week, with over 560,000 tons of corn sent there. Mexico, Japan and
Korea were also leading buyers of U.S. corn.
-- The EIA is scheduled to release its weekly ethanol production
and stocks report at 10:30 a.m. EDT Wednesday.
-- Ethanol producer Valero Energy Corp. is due to release its
first-quarter earnings before the market opens Thursday.
-- The USDA is scheduled to release its weekly export sales
report at 8:30 a.m. EDT Thursday.
-- The USDA is due to release its monthly cold storage report at
3 p.m. EDT Thursday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
April 19, 2021 16:07 ET (20:07 GMT)
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