Grain Exchange – 4-6-2021
The USDA released their 2021 US Prospective plantings and Grain stocks report on Wednesday of last week. The corn and bean markets experienced a lock limit up trade for the session on what was a surprising cut in both the corn and bean acres.
The average analyst estimate for bean acreage came in at 90.1 mil which is well above the 87.6 mil reported for 2021 planting intensions. The USDA reported 91.1 mil acres to be planted for corn this year with the trade expecting 93.1 mil. Wheat will continue to be the weak link in the grain room with the All Wheat intension being 46.4 mil acres and the trade only expecting 44.9 mil.
The same rhetoric applies to the March 1 stocks report with both corn and beans coming in near trades expectations and wheat being higher with analysts expecting 1.271 bil bu and the UDSA reporting 1.314 bil bu.
Follow through excitement due to the report fell short headed into the close of Thursday’s trade in front of a long holiday weekend and the grain markets have experienced a sideways to lower trade for the last few periods. Although the new highs that were made last week were not sustained, grain is still trading at the upper end of its recent range. With the November bean contract at the time of this writing at $12.70/bu you will see near $12 cash price in most areas and December corn at 4.83 futures will give you a $4.50 cash bid in a lot of regions.
Now that planting intensions are out of the way, we expect to see a weather trade moving forward. Monday afternoon planting progress reports have begun. Corn progress is minimal at 2% compared to 2% last year and 2% on the 5-year average. Spring wheat is 3% planted, the same as last year and 2% is the 5-year average. Winter wheat has a good to excellent rating of 53% compared to 62% last year and 52% on the 5-year average.
Here are a few take-aways from last week’s trade: the specs are still heavily involved in commodities and give us the opportunity to sell grain at higher prices when they decide to jump in. Having working orders in place is a system that continuously works. If you have questions regarding placing open orders please call your local Grain Sales specialist or elevator, we will be very happy to walk you through this process. You put a target in place that you would like for your grain and if the market jumps up to hit it, as it did last week, your contracts are automatically filled. No need to constantly check your phone to see if your target is close. No more changing your mind when the market gets to your target and not making a sale, only to have the market slip lower and leaving you with regret of not selling, which could have easily happened in last week. Marketing is one of the most emotional pieces of grain farming and it has happened to everyone at some point. In addition, heading into planting season will leave producers very busy and potentially unable to watch the markets as closely as you wish.
We look forward to working with you and would love to hear from you! Give us a call when you’re headed back and forth in the field this spring, we’d love to hear how it’s going!