Morning Comments May 6, 2021

Corn closeup

Corn continues to be the leader in our commodity market rally, as both July and December corn futures made new highs again overnight. Additional private estimates of Brazil’s safrinha (second season) corn crop have been coming out this week, some of them as low as 95MMT! The USDA had that crop forecasted at 109MMT last month. What will they say in next week’s report (out at 11 am on the 12th)? Well for perspective, if they show a 10MMT reduction that would equate to nearly 400 million bushels- not chump change. 

So, what exactly does a short safrinha crop in Brazil mean for U.S. exports? Well, when they do get to harvesting down there, Brazil will be in the export game for July/August (they can’t hold it all, in particular in the Central/Western region of Mato Grosso). After that though?? They could tap out around October/November (crop size depending), which once again puts U.S. corn exports in the crosshairs for another large program from December through May of next year. 

The solve for this market remains the same – we need to ration demand the best we can, in particular on old crop and we need both acres and yield to reach full potential here in the U.S. High prices, do your work and Mother Nature, please cooperate!

Currently

Corn is 3 to 6 cents higher

Soybeans are 8 to 14 cents higher

May 6 Map 1
May 6 Map 2
May 6 Map 3