Morning Comments May 20, 2021

Soybean Field Sunshine

Our markets are starting the day off mixed, with corn trading a touch higher while beans are trading on both sides of steady. Corn had a wild ride yesterday, down 20c at one point only to claw all the way back higher and end the day trading dead even. One of the reasons for the recovery? We saw another private estimate on Brazilian corn production, this time from AgroConsult who pegged the total corn crop down there at 91.1m MT. For comparison, the USDA was at 102m MT in last week’s S&D report. So, that story is not yet written as there could/should be another downward revision in the next report.

In other corn demand news, the weekly ethanol report showed ethanol production jumping higher for the fourth week in a row, with production now approaching pre-COVID levels. This will be something to watch over time, as a cumulative higher production level from here on out could/should eventually trigger an upward adjustment in the USDA’s demand category of corn use for ethanol, further tightening our carryout. Of course, as we’ve learned a lot in the past 12 months, a lot can change quickly.

For today, I expect more of the same volatility we’ve been seeing. The improving U.S. weather (and assumed acreage situation along with it) is still a drag on the market and the bears in the room are quick to talk about it and trade on it. They have a headwind though as seemingly every morning we see new purchases of corn (new crop for the most part) from China, while the Brazilian crop forecasts continue to slide.

Currently

Corn is 3 to 5 cents higher

Soybeans are steady to 3 cents higher

May 20 Map 1
May 20 Map 2