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www.thelandonline.com — “Where Farm and Family Meet”
THE LAND — APRIL 30/MAY 7, 2021
MARKETING
Grain Outlook USDA’s world corn estimates may be high
Livestock Angles Livestock markets ripe for change in direction
90,000 metric tons from the The livestock markets are Covid lockdowns are being The following marketing survey’s February outlook. at a very interesting juncture relaxed. The other reason has analysis is for the week endThere has been chatter in the as we approach the end of the been the fear of increased ing April 23. trade that Brazil’s total corn month of April. The cattle inflation due to the heavy CORN — Let’s just take a crop may drop closer to 100 market (including feeder catgovernment spending which moment and absorb this mmt. Does anyone buy the tle) has been under some is taking place at the present week’s impressive rally to pricUSDA’s 109 mmt outlook? pretty good selling pressure and in the future. es not seen since July 2013! Brazil has also suspended and has appeared to estabThe interesting point to this Old crop corn contracts locked their import duty on non-Mer- lish a top at this time. On the is the movement of boxed beef up the 25-cent limit on April cosur corn, soybeans, meal, other hand, the hog market JOE TEALE has slowed as the prices have 22. The nearby contract closed PHYLLIS NYSTROM and soyoil through 2021 as has been on a streak to the Broker CHS H edging Inc. risen — which is indicating a above $6.00 for the first time they try to slow food inflation. upside through the month. Great Plains Commodity slowing demand for beef at St. Paul since 2013. A combination of Afton, Minn. In Argentina, the Buenos The volatility in the livehigher prices. demand (high basis levels), Aires Grain Exchange put the stock markets has picked up cool temperatures in the A temporary plus to the catUnited States (which will slow germina- corn harvest at 17 percent complete vs. immensely during the month and is tle market was the release of the U.S. tion), stress on Brazil’s safrinha corn the average of 28 percent complete. likely to continue in the weeks ahead. Department of Agriculture’s Cattle on crop caused by a lack of moisture, and The crop rating fell 1 percent to 37 Each category, whether it be the hog Feed report released April 23. This the willingness of money to flow into the percent good/excellent; but they kept complex or the cattle complex, is at report was seen as slightly friendly as market on the long side combined to the production estimate unchanged at levels that could see a sharp change in the placement number was lower than 46 mmt. The Rosario Grains Exchange their respective direction at any time expected. This could bring back some punch prices to multi-year highs. lifted their corn estimate from 47.5 during the weeks ahead. This could optimism to the market on a short term Brazil’s forecast is dry into May when mmt to 50 mmt. The USDA attaché in make for an interesting change in basis. However, the market will be their normal dry season begins. This Argentina put their corn crop at 47 these respective markets as we move focusing on the demand side of the year, a higher-than-normal percentage mmt. The USDA is at 47 mmt. into the month of May. market to bring about a return to of the safrinha corn crop will pollinate U.S. corn planting as of April 18 was The cattle market has definitely higher prices. in May due to late planting outside the “ideal” window. Private estimates are 8 percent complete, spot on the aver- changed direction over the past several The hog market has continued the beginning to suggest Brazil’s corn crop age and slightly less than the 9 per- weeks as it would appear the cattle streak to higher prices since the month will drop below 100 million metric tons. cent expected. Illinois corn planting have topped during the first week of of November last year to levels not As of April 16, Brazil’s first corn har- was 12 percent complete, 4 percent April. The interesting point is that the seen since 2014. Demand for pork — vest was 79 percent complete vs. 76 ahead of average. Corn emergence was beef cutout has continued to rise to both domestic and foreign — has been 2 percent vs. 1 percent on average. levels not seen for many months. percent on average. one of the catalysts behind the strength Weekly export sales were on the Demand has driven the beef cutouts in the market through this rally. The U.S. attaché in China projected China will import 28 mmt of corn this lower end of expectations at 15.3 mil- for several reasons. The firs is the Another reason was the contrast in reopening of many restaurants as the price between beef and pork during the year which compares to the official U.S. See NYSTROM, pg. 17 past year enticed more buying in pork Department of Agriculture forecast for than in beef. However, as the prices 24 mmt. Other private thoughts are between beef and pork have narrowed closer to 30 mmt. China issued new during the past several months, pork guidelines for feed rations to reduce demand has shown signs of weakening. corn/change* soybeans/change* the use of corn and meal in hog and Stewartville $6.30 +.98 $14.97 +1.63 poultry feed. They suggest using wheat, With the hog market overbought, the rice, DDGs, barley, sorghum, corn pro Edgerton $6.55 +.96 $15.40 +1.70 possibility of a correction in the near tein powder, and amino acids, etc. as Jackson $6.52 +.96 $15.11 +1.46 future looms over the market as we substitutes where appropriate. approach the summer months. History Janesville $6.52 +.79 $15.11 +1.55 would suggest the hog market (on a Cannon Falls $6.50 +1.02 $15.05 +1.45 Private estimates for Brazil’s total percentage basis) typically weakens corn crop slid lower this week with one Sleepy Eye $6.64 +1.04 $15.27 +1.63 into the fall months after spring rallies. prominent private consultant falling 2 Average: $6.51 $15.15 At this point, chances are increasing mmt to 103 mmt. Rabobank cut their that prices could weaken in the future forecast 2 mmt to 105 mmt. AgRural Year Ago Average: $2.57 $7.80 weeks. v dropped their outlook 3 mmt to 103.4 Grain prices are effective cash close on April 27. mmt. A Reuters survey of analysts put *Cash grain price change represents a two-week period. Brazil’s corn crop at 107.3 mmt, down
Cash Grain Markets
Information in the above columns is the writer’s opinion. It is no way guaranteed and should not be interpreted as buy/sell advice. Futures trading always involves a certain degree of risk.
