Our corn and soybean markets are continuing with last week’s bullish trend and are running higher again this morning. Same conversations as last week, with maybe a little extra shot of fear in the tone. The South American story at this point “is what it is” (hot/dry during pollination) and private corn production forecasts for Brazil are all slipping in unison. The eye of the market is now switching to North America and I think the drought conditions alone across much of the belt are enough to keep you up at night (read: fear).
Last week the CME announced that they are expanding spec position limits (+75%) and changing the daily price limits for corn and soybean futures. In other words, the “max” change that a contract can occur in a day is changing: the old limit on corn was 25c/bu, the new limit will be 40c/bu. The old limit on soybeans was 70c/bu, the new limit will be $1/bu. That means that in any ONE DAY corn futures can now go up or down 40c and soybeans can go up or down $1. All of this is effective starting 5/3/21.
Overall, for today we look for strong markets with continued volatility. Prices are high enough now where rallies are starting to get ever so slightly rewarded with farmer selling – meanwhile, every dip seems to be swarmed by hungry (fearful) end-users looking for opportunity. Back and forth we will go. The underlying story remains that we have tight balance sheets that cannot handle getting much tighter, whether that be supply decreases (example: crop issues) or demand increases (example: China just. keeps. buying.)
Corn is 10 to 15 cents higher
Soybeans are 7 to 10 cents higher