Weekly Market Update 5/6/2021

Here is your weekly market update from the Garden City Co-op Grain Origination Team.

Trivia

1. Who was the first major league baseball player to pitch the ball over 100 mph?

2. What rookie pitcher hit a home run his very first at-bat?

Answers at the bottom.

Market News

• U.S. Dollar Index still flirting with lows at 90.94. The Dow Jones Industrial Average is making new highs as the upward trend continues. This comes as jobless claims are pegged at 498,000, the lowest level since the "COVID Era". 

• China cancelled 5.5 million bushels of corn for delivery during the 20/21 marketing year this week, while Mexico and unknown put on some flash sales of corn, with Mexico taking 7.2 million bushels and unknown put on 5.8 million bushels. Brazil's second crop driving corn rally as CZ continues to make new highs. ​

• ​Over the past 3 decades corn yields have trended upward for the three main Western Hemisphere producers. This includes the StoneX Brazil's 20/21 yield estimate. While the U.S. yield is estimated to be slightly better than last year, both Brazil and Argentina are seeing yield loss. 

Weather

Temperature volatility? You betchya. Temps look to hit as high as 95 degrees and as low as 38 degrees in the days and nights ahead. Precipitation is forecast to be around normal, with some chances of rain for southwest Kansas. Even with recent precipitation in southwest Kansas, many areas are still in need of beneficial moisture. 

Temperature 6-10 Day	Precipitation 6-10 Day

Corn

Corn just keeps up soaring higher, with July futures up over 40 cents on the week and December futures up over 60. Continued drought and stress on Brazil’s second corn crop is largely fueling this rally, as Brazil’s SAFRAS and Mercado pulled their 2020/21 crop estimate down 8% to 4.7 bbu. A smaller corn crop in Brazil has created concerns about what this means for their export program, as US supplies remain tight with current and continued Chinese sales. This morning’s Export Sales report was below estimates at 5.4 million bushels of old crop and 4.2 million bushels of new crop. Export inspections were solid this week at 84.2 million, up from last week at 76.9 million. China was shipped a whopping 30.3 million bushels. Friday’s CFTC report had the funds as net sellers, bringing their net long position down 5,335 contracts to 378,663. With mostly dry weather, corn continues to go in the ground at a break-neck pace. USDA pegged the corn crop at 46% planted, up 29% week-on-week and well above the 5-year average.

Wheat

Monday marked a rare down day for the wheat market. Getting some pressure from rains, but market did not take long to shake it off and continue its run-up. Wheat has been following corn on this rally due to dry South America conditions. Monday also marked increased daily limits to 45 cents. Winter wheat conditions fell 1% across the country to 48% good to excellent, but KS held steady at 55% good to excellent. Export inspections came in within trading estimates at 18.7 million bushels for the week end 4/29/21. Export sales showed -3.5 million bushels due to cancellations or sales moved to 21-22 crop year, new crop sales showed 14.7 million bushels. The CFTC report showed KC wheat adding 11,291 contracts bringing the net long to 30,038. Extended forecast show chances of rain over the weekend and into early next week.

Soybeans

Steady as she goes with soybeans, Monday gapped higher during the overnight trade, but could not be sustained settled lower. The rest of this week has been steady Eddie in the green. Daily limit for bean increased to a $1.00 from 70 cents on Monday. The CFTC report was a non-starter this week, adding 7,470 contracts making the net long 180,014 contracts. March U.S. soybean crush came in at 188.2 million bushels, just below the average trade estimate of 188.4 million bushels and 192.2 million bushels last year, but above 164.4 million bushels last month. Trade estimates ranged from 188.0-189.2 million bushels. Planting took a big jump from 8% to 24%, up from 21% last years and the 11% 5-year average. Inspections report showed 5.3 million bushels shipped, just below average trade estimates. Export sales showed soybeans at 6.1 million bushels and new crop at 7.1 million bushels sold. Next week the USDA will release their May WASDE numbers, we will see if they give any indication of more acres being planted.

Milo 

Milo continues to be along for this crazy ride in corn futures. Old crop basis has weakened, with new crop basis steady. USDA estimated on Monday that the US milo crop is 20% planted. The majority of that is in Texas, which also received widespread welcome rains earlier in the week. Export inspections were solid this week at 9.3 million bushels, up from the previous week at 7.2 million. Export sales were at 2.2 million bushels, all in the new crop slot.

Trivia Answers

1. Nolan Ryan at 100.8 mph

2. Hoyt Wilhelm, at age 28, was playing for the NY Giants. His baseball career lasted 21 years and he never hit another home run.