Corn Rises as Midwest Remains Frigid
By Kirk Maltais
--Corn for May delivery rose 2.5% to $6.06 1/2 a bushel, on the
Chicago Board of Trade Tuesday, as frigid temperatures stress crops
in the Midwest and elsewhere globally.
--Soybeans for May delivery rose 1.5% to $14.72 a bushel.
--Wheat for July delivery rose 1.2% to $6.61 1/4 a bushel.
Weather Squeeze: Cold temperatures in the Midwest boost CBOT
grain futures - led by corn. "Grains have surged to fresh contract
highs on Tuesday as freezing temperatures in the Midwest, continued
dry weather in the U.S. northern Plains, the Canadian Prairies,
parts of Europe & Brazil's Safrinha corn growing region
threaten to further tighten 5-year-low global grain stockpiles,"
said Dave Marshall of Top Ag. Cold temperatures are expected to
linger in the Midwest - particularly the Southern Plains -- over
the next two days with more seasonal conditions returning in the
next 7-10 days, according to DTN.
Explosive Beans: Today marked a six session winning streak for
soybeans. "Beans are looking explosive as May needs to trade to
whatever level it takes to move beans into delivery channels, or
the longs that are expected to take delivery decide their hedge
profits are high enough and that they can wait until cheaper beans
are available," said Doug Bergman of RCM Alternatives. Soybean
futures are nearing the $15 per bushel mark, which if reached would
be the first time since June 2014.
Grand Slam: Corn futures edged over the $6 per bushel level on
Tuesday -- to highs unseen since 2013. Even with corn prices at
this level, futures still have upside left, said Peter Meyer of
S&P Global Platts. "Calling a top at this point is just
frivolous," said Mr. Meyers, adding that ethanol plants in the U.S.
are experiencing difficulty procuring the corn they need for their
daily operations. "These farmers are holding onto this stuff,
they're not making it easy," said Mr. Meyers. "They're all looking
for the home run."
Press Start: The uptick in grain futures today comes after
Monday afternoon's USDA weekly crop progress report in which the
USDA said farmers planted 8% of the corn crop, 3% of the soybeans
crop and 19% of the spring wheat crop. "Even with less than ideal
conditions we did see planting in the US last week," said Karl
Setzer of AgriVisor. "We are starting to see an overall shift in
market attitude. While old crop balance sheets are very much a
factor in price discovery, we are starting to see more interest in
Burning Barrels: U.S. ethanol stockpiles are expected to
continue their slide in this week's report from the EIA - with
analysts surveyed by Dow Jones forecasting stockpiles falling to
between 20.15 million barrels and 20.47 million barrels. If the EIA
again reports a decline in ethanol stockpiles, it'll be the ninth
consecutive week that ethanol inventories moved lower. Meanwhile,
ethanol production is expected to climb, by as much as 20,000
barrels per day according to analysts.
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
--Ethanol producer Valero Energy Corp. will release its
first-quarter earnings before the market opens Thursday.
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
--The USDA will release its monthly cold storage report at 3
p.m. ET Thursday.
Write to Kirk Maltais at email@example.com
(END) Dow Jones Newswires
April 20, 2021 15:24 ET (19:24 GMT)
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