AgriVisor Market Recap

Thursday, April 08, 2021
The majority of today’s session was spent getting final positions in place ahead of tomorrow’s WASDE report. Trade is expecting friendly numbers, although to see minimal changes from the March release would not be surprising. Export sales data this morning was mixed as cancellations gave us a net negative number on soybeans. Trade was quick to shrug this off though as reduced soybean demand is needed. A weaker US dollar benefited all commodities, while reports of active planting across the US limited advances. We are seeing some concern voiced over the potential for a hot, dry summer in the US which is already getting a market reaction. 

Export sales for the week ending April 1st were more favorable for corn than soybeans or wheat. Corn sales totaled 29.8 million bu (mbu) on old crop corn and 2 mbu for new crop. Corn has surpassed its yearly sales estimate and any demand is considered friendly at this point. Wheat sales were only half the amount needed with 3 mbu, but new crop sales were favorable at 19.5 mbu. Old crop soybean sales were a negative 3.4 mbu as China washed out of nearly 8 mbu of previous bookings. China was the main new crop buyer, however, where sales totaled 12.4 mbu. 

Beef sales for the week were down 3% from the previous week at 18,200 metric tons. Nearly half of this was booked by South Korea, and another third was taken by Japan. Pork sales were down 45% from the previous week at 33,400 metric tons with Mexico being the primary buyer. We did see business with China last week, but the volume was minimal. 

Census beef and pork export data for the month of February was mixed. Beef exports in the month were up 1.8% from January at 250.3 million pounds. This was the 2nd highest monthly total on record. Pork sales decreased on the month though, totaling 591.9 million pounds compared to 606 million pounds in January. 

The Brazilian firm CONAB released its production updates today, increasing them on both corn and soybeans from last month. CONAB is now predicting a Brazilian soybean crop of 135.5 mmt compared to its previous estimate for 135.1 mmt. The firm’s corn crop estimate is for 109 mmt, up from their March estimate for 108.1 mmt. These are both considerably larger than last year’s crops of 124.8 mmt of soybeans and 102.5 mmt of corn. 

The United Nation’s Food and Agricultural Organization released its world food value data today, increasing them for the 10th consecutive month. World food values increased 2.1% from March, putting them at the highest levels since 2014.The majority of the increase was from vegetable oils which were up 8% in the month. Meat prices were also up 2.3% in March, although cereal values declined 1.7%. 

The majority of the interest on tomorrow’s reports is on the domestic balance sheets. The average corn carryout estimate is for 1.38 billion bu, a 123 mbu decrease from the March estimate. Soybean ending stocks are pegged at 118 mbu, down 2 mbu from last month. Wheat ending stocks are expected to come out at 846 mbu, a 10 mbu increase from a month ago. 

Expected changes to global balance sheets are similar to the domestic side. World corn reserves are projected to total 284.4 million metric tons (mmt), down 3.3 mmt from March. Soybean reserves are expected to come in at 83.3 mmt, down 400,000 metric tons from a month ago. Global wheat reserves are expected to increase 600,000 metric tons though to total 301.7 mmt. Same as with the domestic side, all interest will likely fall on the soybean figures. 

Trade will also pay close attention to the South American crop sizes, with an emphasis on Brazil and Argentina. Brazil crops are forecast at 108.3 mmt on corn and 134.2 mmt on soybeans. This is a slight increase on soybeans but a small decrease on corn. The Argentine crops are expected to total 46.7 mmt on both corn and soybeans. Private forecasters have started to increase their South American estimates though, which may be more of a factor than the USDA figures. 

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is believed to be reliable but is not guaranteed to accuracy or completeness by AgriVisor, LLC. This report is provided for informational purposes only and is not furnished for the purpose of, nor intended to be relied upon for specific trading in commodities herein named.  This is not independent research and is provided as a service.  As such, this is considered a solicitation.