Morning Comments April 30, 2021

Cover Crop

Our corn and soybean markets were both trading higher at one point last night, only to slip away; now both are trading in the red as I type this. The most surprising thing to me last night? The narrow range! Corn traded in a 6c range last night (range: the difference between high price and low price); I swear lately it felt like a 6c move was just another 5 minutes of action in this market. For better or worse, I do expect the volatility to return and stay with us through the rest of the growing season. That’s the nature of being in a weather market with a tight balance sheet.

The quiet session last night could just be exhaustion as we approach month-end. After all, July corn futures are just almost a DOLLAR PER BUSHEL higher than they were at the end of March (December futures are ~65 cents higher FYI). Yep. $1/bushel. If you think about that, to see the market take a break is not surprising; I know I’m tired. Maybe for today, if the market does coast a bit into month-end, we should take a few notes and remind ourselves of a few key fundamental thoughts the market is trading today:

  • Overall commodity demand remains strong. Exports. Ethanol. Hogs. Poultry. Nobody seems to be flinching.
  • Brazil’s second-season corn crop is still missing rains; estimates for production there are likely get cut again. This could keep any current U.S. export sales from flipping hemispheres on us.
  • U.S. planting progress seems to be coming along very well (to be proven in Monday afternoon’s report). This is a good thing; the S&D needs a better than normal start to this crop.
  • U.S. drought concerns are becoming more “real,” but they still feel a bit secondary to me. It might be after we see the crop in the ground (all we need is rain, right?) and start seeing good/excellent ratings before that shifts into a higher gear.
  • The U.S. farmer has an opportunity to lock in profitable margins (for multiple crop years in some cases). These opportunities have been few and far between the last few years. This, of course, is a great thing.


Corn is steady to a couple cents weaker

Soybeans are 2 to 5 cents lower

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