Markets - General
Commodity prices jumped even higher to start the week, with May corn futures topping $6 again Tuesday. Farmers are reporting local elevators posting new crop corn bids over $5, as well. What’s driving the momentum?
The U.S. Department of Agriculture’s statistics division is conducting a “deep dive” review of how it conducts its quarterly U.S. grain stocks reports, an official said during an online conference on Wednesday.
U.S. soybean farmers could be in for a volatile price ride this year. With already tight stocks with robust demand, Blue Reef Agri-Marketing’s Chip Nellinger says soybean prices could see extreme volatility this year.
May corn futures closed in on $6 Wednesday, a price move being driven by a number of factors. Brian Doherty with Total Farm Marketing says corn’s performance is one for the record books.
China’s soybean imports almost doubled in March from levels in the same month a year earlier, data from customs showed on Tuesday, as cargoes of beans from top exporter Brazil cleared customs after delays.
Successive cold snaps in the past week have destroyed between 30,000 and 50,000 hectares of French sugar beet, growers group CGB said on Monday, calling it the worst frost-related losses for the sector ever recorded.
The dollar slipped on Monday towards a three-week low as Treasury yields traded near recent lows and traders awaited crucial U.S. inflation and retail sales data in coming days.
The supply-and-demand outlook already suggested profit potential into 2022/23 (not continuously high prices, but profit opportunities).
Cotton futures rose on Wednesday supported by concerns that dry weather in West Texas, the largest U.S cotton-producing region, may weigh on U.S supplies of the crop.
Cotton futures slumped more than 3% on Thursday as a U.S. government report showed a sharp slide in weekly export sales, putting prices of the natural fiber on course for their third straight weekly decline.
Just a day ahead of two major USDA reports, soybean prices slid. The May contract closed 26 cents lower on Tuesday, with prices settled at $13.66. Corn saw similar action on the CME Tuesday.
Hard late-March rains in Argentina have set the stage for smooth wheat and barley sowing, but the storms arrived too late to help corn and soy yields in areas that had been pounded by months of dry weather.
Cotton futures edged lower in choppy trading on Monday, pressured by a firmer dollar, while expectations for a reduction to forecasts for planted acreage in a federal report due later this week put a floor under prices.
It’s not just the record prevent plant acres in North Dakota last year that will come into play in 2020, fall field work in 2020 also saw a record. And current seed sales show more corn acres in 2021.
The outlook for agriculture is uncertain, but more optimistic than it was a few months ago, according to the 2021 U.S. Baseline Outlook report compiled by FAPRI.
The Fed on Wednesday repeated its pledge to keep its target interest rate near zero for years to come after projecting a rapid jump in U.S. economic growth and inflation this year as the COVID-19 crisis winds down.
The March WASDE report left corn and soybean supply and demand unchanged.
A commodity swap is used to hedge against commodity price swings by locking in a price.
Corn, soybeans and wheat experienced double-digit price gains on Tuesday, a product of the 2021 bull market. And as prices continue to see the extreme price moves, some think the bull market could last beyond this year.
Understand the fundamentals at play for prices.
While analysts say it’s possible, yet not likely corn prices hit $18 per bushel, there are some factors fueling the market today. It’s not just the supply and demand scenario, but also the possibility of inflation.
The bull market right now is one driven by not just tight supplies, but monster demand. Two marketing analysts say even with an expected increase in acres, tight supplies mean prices can absorb more production.
USDA’s Ag Outlook Forum painted a brighter forecast for corn demand this year. While USDA does expect a 7% increase in production, the agency is also forecasting an increase in domestic use, as well as exports.
Unprecedented U.S. weather conditions, export numbers and USDA’s Ag Outlook Forum all weighed on prices this week, says Jamie Wasemiller, market analyst with Gulke Group.
USDA issued its first look at acreage during the annual Ag Outlook Forum with a record number of combined corn and soybean acres projected this year. Some analysts say given prices, that number has room to grow.
During USDA’s 2021 Ag Outlook Forum this week, chief economist Seth Meyer pointed to a possible bump in overall planted acres this year, with 92 million in corn, 90 million in soybeans and 12 million acres of cotton.
As USDA prepares to give its first glimpse at 2021 acreage this year, the acreage debate could be dynamic as tighter supplies will encourage planting.
As the substantial demand looks to be rooted in a need for feed and food, corn purchases from China may not be over yet and could be on track to hit a new record. However, actual shipments are lagging.
The corn price momentum quickly faded on Tuesday as traders seemed disappointed by conservative adjustments to its corn import forecast for China.
A month after USDA releases its final production estimates, USDA’s February report typically doesn’t provide major revisions. With possible changes to corn demand, analysts say Tuesday’s report could be different.