Beans: 5 to 7 better
The stabilization of ethanol consumption and the strength in the energy markets gave the corn market a lift yesterday. Based on this week’s production, it is estimated that roughly 53 million bushels of corn was used, 49 mil bushels less than last year’s same-week usage, bringing the 2019/20 marketing year-to-date total corn for ethanol usage decline to an estimated 173 mil bushels. The demand destruction along with a large percentage of the corn crop in the planted in a timely manner into good soil conditions, is going to make it hard to sustain rallies. However, US gasoline demand rebounded last week to 5.860 mbpd from 5.311 mbpd the previous week, with each of the last three week’s demand rates moving higher from the low of the first week of April which is encouraging to see.
Soybean demand is holding in there more so than corn, with domestic crush the only real thriving usage area at this point, despite Chinese soybean export demand still mostly going to the South Americans. Decent U.S. weather should also keep corn-to-soy acreage switching to a minimum this spring, and give the soybean supply and demand some hope heading into 2020/21 if China returns to our market in a big way this summer. Soybean crush has stayed very strong as March soybean crush was seen at a record 191.5 million bushels, up from the previous high of 188.8 mbu in January, and above 175.3 mbu in February and 179.4 mbu last March.
Rains have exited the corn belt for the most part with scattered showers in the NE Midwest. Both the 6-10 and 11-15 day forecasts are running drier overall today with below-normal temperatures projected through mid-May. Rains are on the way for Brazilian safrinha corn areas during the middle of next week to ease stress there and Argentina will remain dry to aid corn and soybean harvest there.