It was sort of a crazy week looking back at grain price movements.
With persistent dry conditions and possible increased global demand for feed wheat, all grain prices continued to climb higher, for the fourth week in a row.
Corn prices continued to rally this week, specifically in May, up 12.89% (84 ½ cents) while posting new contract highs.
The two week move is 26.39%!
July was up 40 ¾ cents since last Friday, with new crop December rallying just 13 cents.
Also the Wheat complex continued the rally this week, with each of the three exchanges seeing new contract highs in the nearby contracts.
Chicago SRW was up 4.54% on the week, with KC HRW 3.71% higher.
Minneapolis spring wheat rose another 6.23% as planting continues and acreage must be kept away from corn and soybeans.
April was a strong month for wheat as well, with CBT packing on a 20.15% gain, KC up 21.28%, and MPLS 24.97% higher.
Soybean prices, meantime, saw a pull back this week before recapturing the entire loss on Friday to post a 31 ¼ cent gain.
Soy Meal was up just $3.60/ton on the week, lower hog numbers are holding demand back.
Bean oil continues to be the driver of the market with futures up 9.17% and nearly taking out the all-time high from 2008.
Bean oil was the largest mover on the month, with May up 29.37%, beans up 9.34%, and meal 0.66% higher.
The Baltic Dry Index (BDI), an assessment of the average cost to ship raw materials such as grains, coal and iron ore, gained 9% on the week to end at 3,007.
The U.S. Dollar Index increased from last week’s 90.87 to close at 91.26.
Dryness in Brazil continued played a important role, as SAFRAS & Mercado reduced their estimate by nearly 8.6 MMT to 104.14 MMT.
Planting is starting to roll across the US, with 17% planted as of last Sunday, and several areas getting good progress in on the week.
Conditions in the western half of Texas and Oklahoma remained dry this week.
Parts of southeast Kansas, Colorado the Dakotas, Wyoming and western Montana received some rain but most of the region remained excessively dry.
Across the Dakota’s and parts of Montana, low soil moisture was reported and streams are low.
The USDA rates Colorado, Montana and Wyoming as being more than 50% short or very short of topsoil moisture.
Meantime, USDA reported U.S. winter wheat conditions declined this week.
Winter wheat reported as good or excellent was 49%, 8% below last week’s rating as dry conditions persisted in much of the hard red winter producing region.
U.S spring wheat for harvest in fall 2021 is 28% planted, well ahead of the 19% five-year average.
Spring wheat emergence is 7%, 2 points above the five-year average.
The weekly Export Sales report indicated old crop corn at 521,7227 MT 553,374 MT for 2021/22 delivery for the week of 4/22.
That took the 20/21 shipped and unshipped sale total to 100% of USDA forecast vs. the 88% average.
Exports have reached 61% of the WASDE full year projection, with the normal pace at 58% by this point in April.
About wheat, the report showed old crop wheat bookings at 223,565 MT.
That brought total wheat export commitments for 20/21 to 25.833 MMT, totaling 96% of the USDA projection, vs. the average pace of 104%.
New crop sales totaled 237,663 MT.
Meantime, soybean export sales, saw boosted bean bookings of 292,509 MT for old crop and a 12-week high 439,009 MT for new crop.
Total old crop export commitments for the MY are now 99% of the USDA full-year forecast, compared to the 5-year average pace of 93% for this date.
Shipments have progressed to 90% of that projection vs. the 78% average pace.
In Friday’s CFTC commitment of Traders report, spec funds in corn futures and options were shown to back off their net long position by 5,335 contracts as of 4/27 to 378,663.
That was despite an 89 cent Tuesday/Tuesday rally, which saw commercials liquidate 59,425 contracts from their shorts.
The net short commercial position stood at 710,596 contracts, down 18,037 on the week.
The large spec traders in CBT wheat futures and options, added 11,816 contracts to their net long position as of Tuesday to 13,399 contracts.
In KC wheat, they added a net 11,291 contracts to bring the net long position to 30,038 contracts.
The report also showed managed money spec funds in soybean futures and options adding another 7,470 contracts to their net long position at 180,014 contracts on Tuesday.
That is the largest recorded position it for bean specs since December 29.
In this context, CBOT soft red winter (SRW) futures rose 32 cents to close at $7.42/bu.
KCBT hard red winter (HRW) futures were up 25 cents to end at $6.98/bu.
MGE hard red spring (HRS) futures gained 45 cents to close at $7.63/bu.
CBOT corn futures jumped 85 cents to end at $7.40/bu.
CBOT soybean futures gained 32 cents to close at $15.71/bu.
On European market, Euronext ended the week with Matif May wheat futures gained 21,50 euros to end at €257,75/t.
Matif corn June futures raised 11,00 euros to close at €241,25/t.
While, Matif rapeseed May futures expired on Thuersday, jumping 89,75 euros to end the week at €681,25/t, meantime August futures close to 504,00 euros.
The European Commission lowered its common wheat production forecast for 2021/22 to 124.8 MMT from its initial estimate of 126.7 MMT last month.
Export projections were not changed and remain at 30.0 MMT.
Soft wheat ending stocks are 11.4 MMT, down from 12.9 MMT called for last month.
Despite the reduction, production would be more than the 117.2 MMT produced in 2020/21.
Future barley production is estimated at 56 million tonnes against 56.3 posted last month.
Ukraine’s wheat harvest is expected to grow by 9.5% to 27.7 MMT this year and wheat exports are boosted to 21.0 MMT for the 2021/22 JulyJune season said the Ukrainian grain trader’s union UGA.
India’s wheat stocks, already high, are expected to grow this year as Indian farmers may harvest a record 109.0 MMT of wheat.
While farmers continue to protest government reforms meant to make farming more efficient, traders say the government will likely have to purchase farmer wheat at guaranteed prices.
Wheat stocks in government silos are estimated at 27.3 MMT.
Last year, the Food Corporation of India (FCI) purchased 39.0 MMT of wheat directly from farmers.
The USDA’s Foreign Agriculture Service (FAS) forecasted Australia’s wheat production in 2021/22 to be 27.0 MMT.
The FAS officials in Australia also expect wheat exports at 19.0 MMT, down from 23.0 MMT forecast in 2020/21.
According to FAS officials based in Ottawa, Canada’s total wheat production will fall 5% in 2021/22 and yields will be close to the 5-year average.
Spring wheat production is expected to fall while durum production is expected to increase.
Regions of Alberta, Manitoba, and Saskatchewan need significant amounts of precipitation.
We have an entire growing season ahead of us and the markets could do some crazy things depending on how the crops look in U.S. or in Brazil.
