Special Market Update

The most anticipated day of the year in grain markets has come and gone; leaving us with plenty of new information to digest. Last weeks Quarterly Stocks and Acreage report along with the Prospective Planting report sent the markets on a roller coaster and left us with a new dynamic.

Soybean stocks as of March one totaled 1.564 billion bushels, this was slightly above the average trade guess. The real shock came in 2021 estimated planted acres, coming in at 87.6 million acres. This estimate was 2.4 million acres below the average trade guess! The neutral stocks report mixed with the bullish new crop acreage number has started to break the inverse in the market. We saw futures go limit on the day of the report, and in the days following deferred futures have out paced the nearby futures. The inverse from July futures to November went from +180 on report day to as low as +135 before rebounding a few cents. This is the market telling us we feel comfortable on old crop supply, and we are screaming for more new crop acres. Forecasting supply and demand for new crop using a 52 national yield still puts us sub 200mbu on carryout. Given the positive reaction in SX21 post report (up 90 cents since report day) more acres will be planted, question is how many? Going into a crop year with a very tight forecasted carryout, planting will hold a significant premium. The market wants to ensure the crop gets planted, reaches maturity in time and gets the rains to finish out.

Corn had much of the same story as soybeans. Stocks were comfortable, 7.701 billion bushels vs a 7.75 average trade guess. If you thought new crop soybean acreage was low, you better hold on to your hat. Corn new crop acres came in at 91.144 million, over 2 million bushels below the average trade guess, and below even the lowest analyst expectation. CZ21 is up 33 cents since report day and continues to hold firm. 5-dollar futures have become a target for many producers and will be a significant resistance level. The overall market bias is that these recent rallies will buy more acres, and we will see larger planted acre numbers printed before the fall. In the meantime, we have a WASDE report this Friday, April 9^th. Corn and soybeans are both close to 100% sold vs the USDA export number, it just becomes about loading out the physical commodity each week. Follow us on twitter for market commentary and pre/post report analysis. You can also click here to sign up for daily futures comments via text messages.