Weekly Market Wrap-Up
Grain Market Commentary
Friday, May 7, 2021
by Jennifer Klindt, Account Representative, The Andersons
The week began on Sunday evening with corn and soybeans rallying to new highs on rumors of Chinese buying, but the highs couldn’t hold through Monday’s session. Export inspections were released, nearly exceeding expectations for corn and on the low end of expectations for soybeans. July corn futures closed the day 6.25 cents higher at $6.7950. July soybean futures closed 10.25 cents lower at $15.24. Worry about overall China soybean demand and a larger Brazilian soybean crop caused bean trade to fall lower. Monday’s Crop Progress marked U.S. corn planting at 46% complete and soybean planting at 24% nationwide. Brazilian weather continues to show no rain in sight to aid the extreme dryness of the Safrinha corn crop. As private firms lower yield estimates for Brazil’s corn crop, trade concerns linger over world supply. The CBOT daily limit increase was effective beginning Monday, adding potential volatility to the market. Daily limits increased from 25 to 40 cents on corn and 70 cents to $1 on soybeans.
Tuesday’s trade marked upside for both corn and soybeans lead by the corn sector. Dryness in Brazil continues with hot temperatures and no rain in sight. Trade is also concerned about Western Corn Belt dryness. Even though U.S. planting is off to a great start, the market is factoring in risk premium until it has better confidence of crop projections. July corn futures closed the day at 6.9675, a gain of 17.25 cents. July soybeans closed at 15.3825, a gain of 14.25 cents.
Trade on Wednesday showed continual gains due to U.S. and Brazilian weather. Many private firms are estimating Brazilian Safrinha corn losses at a potential 5-10 MMT. Weekly Ethanol Production showed a slight increase for the week. The USDA announced flash corn sales of 147 tmt to unknown (combination of 20/21 & 21/22) and 184 tmt to Mexico (21/22). It was also noted that China cancelled 140 tmt of corn for this year. Soybeans continue to trend upward following corn futures, but supplies could be shifting as organizations estimate higher yields for Brazilian soybean production. July corn futures closed the day 11.75 cents higher at 7.085. July soybean futures closed 4 cents higher at 15.4225.
Corn and soybean futures held strong during Thursday’s session. July corn futures closed the day at 7.1875, a gain of 10.25 cents. July soybean futures closed at 15.695, a gain of 27.25 cents. Soybeans rallied following soybean oil due to strong demand. Export sales released were on the weaker side for both corn and soybeans. China’s government announced improved subsidies for corn and soybean to incentivize production. Brazil’s forecast for the Safrinha crop continues to show a drought pattern with no precipitation in sight.
Trade on Friday began higher and traded lower mid-session but rebounded by the close. July corn futures closed the day 13.5 cents higher at 7.3225. July soybean futures closed 20.25 cents higher at 15.8975. The USDA announced corn flash sales of 1.36 MMT to China (21/22), 86 tmt to unknown (20/21), and 101 tmt to unknown (21/22). Key market factors that remain are U.S. weather & planting progress, Brazil dryness, Chinese demand, fund positioning, and The USDA’s WASDE to be released on Wednesday, May 12th.
July corn futures opened the week at $6.85 and closed the week at $7.3225, a gain of 47.25 cents.
July soybean futures opened the week at $15.4925 and closed the week at $15.8975, a gain of 40.5 cents.
July wheat futures opened the week at $7.3975 and closed the week at $7.6175, a gain of 22 cents.