Ag Market Recap for Apr 21

by Steve Freed,

SOYBEANS
May soybeans tested key support near 8.10. Prices found some buying there. Sharply lower palmoil prices weighed on soyoil prices. Soymeal also found some buying near session lows. There continues to be some concern about Argentina exports logistics. Fact China continues to buy Brazil soybean through August is offering resistance to soybean prices. USDA estimated that 2 pct of US 2020 soybean crop is planted versus 1 average. Drop in domestic meat production could also slow US soybean crush. Drop in demand could increase US 2019/20 carryout. Trade estimates US 2020 soybean crop near 4,180 mil bu versus 3,558 last year. Key to prices could be if demand increases to 4,350 versus 4,002 this year. Open interest is increasing. Trade volume increased today.

CORN
May corn futures tested key support from 2016 and near 3.02. There was some short covering and buying near that price levels. Demand for US export is improving. This may be supporting the basis. USDA estimated that US corn planting is near 7 pct done versus 9 average. Open weather for the rest of this week and by Sunday plantings could be near 23 pct done. Next US Midwest rain event is forecasted for early next week. CZ20-CZ21 spread continues to widen suggesting farmers may need to store a large percent of the 2020 crop. Most look for US 2020 corn crop to be near 15,760 mil bu versus 13,692 last year. Key is demand. Will the virus be under control and total demand increases to 14,815 versus 13,865 this year. Or will the virus continue to slow demand especially energy. Fact June Crude Oil bounced off session lows near 6.50 and rebounded to near 13.41 may have offered support. Open interest continues to go up and today’s volume also increased.

WHEAT
Most of the wheat news was supportive. WN closed down 1 cent and near 5.46. KWN closed up 2 cents and near 5.04. MWN closed down 5 cents and near 5.18. Wheat futures were under pressure on concern about increase deflation led by lower energy prices. KC wheat futures found support from fact USDA dropped weekly US winter wheat crop ratings from 62 pct good/ex to 57. Most of the decline was in south plains HRW are and PNW white wheat area. Most look for a US 2020 wheat crop near 1,840 mil bu versus 1,920 last year. If demand is near 2,190 versus 2,135 this year, carryout could drop to 750. Key will be North Hemisphere weather. Normal weather could send futures sharply lower. Dryness in US. EU and Black Sea could send WN closer to 6.00.

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