Wednesday Afternoon Comments (4/23) A supportive demand picture and concern over wet weather moving into the Midwest the next 5-6 days and being accompanied by cool temperatures allowed corn to post another strong day with futures closing 7-8 cents higher. Weather forecasts are calling for ¾ to 3 inches of rain in two weather systems moving through the Midwest but forecasts following these systems seem to be improving. Good planting progress has been made the past few days but the market continues to trade concern over perceived planting delays. Could we be 20%+ planted in Monday’s report? This would be much better than last year but behind the 5 year average of 30%. Funds were back on the buy side today, buying 8,000 contracts by mid-session, partially on unwinding bean/corn spreads. Weekly ethanol report showed production down 3.1% from last week but 6.7% above last year. Corn used for ethanol was 95.55 mln. bu., down 3 mln. bu. from last week and 3 mln. bu. below what is needed on a weekly basis to meet USDA projections. Weekly export corn sales tomorrow are expected to fall between 19.7-31.5 mln. bu.
Interesting bean market today as old crop down 11 cents and new crop up 12 cents. News of Chinese cargoes being rerouted to the U.S., China selling domestic supplies at auction, and Chinese buyers having credit issues as well as poor crush margins are all pushing the nearby lower. Unwinding long bean/short corn spreads also at work and old crop/new crop bean spread unwinding was supportive to new crop. In addition to this, the market remains concerned over domestic U.S. supplies until new crop is available. Estimates are that the U.S. will need to import 75+ mln. bu. of beans vs. current USDA projections of 65 mln. bu. Estimate is that U.S. will import 35+/- mln. bu. of beans from Canada, which means we will need to import 40 mln. bu. from S. America or roughly 20 cargoes. There is also speculation that the U.S. will import 500,000 tons of soymeal vs. the 215,000 tons currently projected by USDA. All of this, coupled with logistics, will keep things interesting. Weekly export sales tomorrow are expected to fall between -7 mln. bu. and +4 mln. bu. Have a Good & Safe Night!
Duracade Notice: If you are planting corn with the Duracade trait this spring and plan to haul it to Stanford Grain, please let us know. We will need to make arrangements to handle it. Thank You for your cooperation.