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www.thelandonline.com — “Where Farm and Family Meet”
THE LAND — APRIL 30/MAY 7, 2021
MARKETING
Grain Outlook Weather in Brazil pushes corn to unfamiliar heights
Livestock Angles Livestock markets ripe for change in direction
The livestock markets are Covid lockdowns are being The following marketing to 36 percent last year and relaxed. The other reason has analysis is for the week endthe three-year average of 39 at a very interesting juncture been the fear of increased ing April 30. percent complete as of April as we approach the end of the month of April. The cattle inflation due to the heavy 29. The Buenos Aires Grain CORN — Borrowing a market (including feeder catgovernment spending which Exchange rated Argentina’s quote from Bette Davis in All tle) has been under some is taking place at the present corn crop at 41 percent good/ About Eve to describe the pretty good selling pressure and in the future. excellent, up 4 percent from markets, “fasten your seatand has appeared to estabthe previous week. The interesting point to this belts, it’s going to be a bumpy lish a top at this time. On the is the movement of boxed beef night.” Anxiety over the lack The U.S. corn planting pace other hand, the hog market JOE TEALE has slowed as the prices have of rain on Brazil’s safrinha PHYLLIS NYSTROM was slightly behind average has been on a streak to the Broker risen — which is indicating a CHS H edging I nc . corn crop as they enter polliat 17 percent complete as of upside through the month. Great Plains Commodity slowing demand for beef at S t . P aul nation and their dry period, April 25 vs. the 20 percent Afton, Minn. The volatility in the livehigher prices. in combination with strong average. Emergence was on demand and a lack of country pace at 3 percent vs. 4 percent stock markets has picked up A temporary plus to the catmovement, pushed corn to lock up the on average. The weather forecast into immensely during the month and is tle market was the release of the U.S. 25-cent daily trading limit in the May the middle of May looks favorable for likely to continue in the weeks ahead. Department of Agriculture’s Cattle on and July contracts to start the week planting; albeit temperatures may stay Each category, whether it be the hog Feed report released April 23. This and to eight-year highs! July corn slightly below normal. Drought condi- complex or the cattle complex, is at report was seen as slightly friendly as locked limit up to end the week also. tions in the United States are not levels that could see a sharp change in the placement number was lower than The May contract is in delivery and has improving according to the latest their respective direction at any time expected. This could bring back some no daily trading limits. We also saw the drought monitor. Dryness was increas- during the weeks ahead. This could optimism to the market on a short term May trade limit up and the July con- ing over Iowa and Minnesota with 34 make for an interesting change in basis. However, the market will be tract limit down during the same ses- and 25 percent respectively of each these respective markets as we move focusing on the demand side of the sion at mid-week. state experiencing topsoil that is dry to into the month of May. market to bring about a return to The cattle market has definitely higher prices. Nearby, corn punched through $7.00 very dry. The maps indicate 22 percent for the first time since July 2013 and of U.S. corn areas are experiencing changed direction over the past several The hog market has continued the December corn traded to its highest some level of drought and 19 percent of weeks as it would appear the cattle streak to higher prices since the month level since February 2013. The inverse the soybean areas. Also beginning to have topped during the first week of of November last year to levels not between the May and July contracts attract attention is the drought in key April. The interesting point is that the seen since 2014. Demand for pork — traded as wide as 63 cents as the May corn producing areas in Mexico. Mexico beef cutout has continued to rise to both domestic and foreign — has been contract headed into delivery and set a record for Q1 corn imports at 4.2 levels not seen for many months. one of the catalysts behind the strength month-end approached. Processors are million metric tons with nearly all of it Demand has driven the beef cutouts in the market through this rally. the market, but exporters also need coming from the United States. A for several reasons. The firs is the Another reason was the contrast in supplies in their pipeline. Country sell- See NYSTROM, pg. 17 reopening of many restaurants as the price between beef and pork during the ing was very quiet except for a few past year enticed more buying in pork periods of new crop selling at new conthan in beef. However, as the prices tract highs. between beef and pork have narrowed during the past several months, pork Normally, in bull markets, we experidemand has shown signs of weakening. corn/change* soybeans/change* ence periods of consolidation and this is likely what we experienced for a few St. Cloud $6.97 +1.10 $15.33 +1.06 With the hog market overbought, the days this week. Brazil’s safrinha corn Madison $6.94 +1.15 $15.40 +.95 possibility of a correction in the near crop is declining and any rain in the future looms over the market as we Redwood Falls $7.01 +1.10 $15.53 +.86 next few weeks may be too little, too approach the summer months. History Fergus Falls $6.95 +1.03 $15.12 +.85 late to be of any real help. Private estiwould suggest the hog market (on a Morris $7.02 +1.11 $15.18 +.81 mates are coming in sub-100 mmt. percentage basis) typically weakens Tracy $6.95 +1.06 $15.61 +.90 Safras & Mercado cut its Brazilian into the fall months after spring rallies. corn outlook to 104.1 mmt from its pre Average: $6.97 $15.36 At this point, chances are increasing vious 112.8 mmt forecast. The U.S. that prices could weaken in the future Year Ago Average: $2.65 $7.69 Department of Agriculture’s last estiweeks. v mate was 109 mmt. Argentina’s ag Grain prices are effective cash close on May 04. secretary placed Argentina’s corn har*Cash grain price change represents a two-week period. vest at 28 percent complete compared
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.
