Closing Market Comments May 20, 2021

Today’s Prices

Grian prices finished mixed today with soybeans weaker on a lack of demand while corn was stronger on very strong items from exports and ethanol.

Grain Market News

Corn: Weekly Export Sales

Weekly corn exports pretty good at 278 tmt. When we say pretty good, that’s pretty compared to what we need to reach USDA’s export estimate. It’s almost double what we need on a weekly basis but it is somewhat disappointing compared to previous year at this time but the massive sales that were made through last winter are more than enough to keep us on track to exceed USDA’s current export forecast

Soybeans: Weekly Export Sales

Soybean export sales shows very small sales that past few weeks with just 84 tmt this week. The good news is that we only need 37 tmt to reach USDA’s export forecast. Right now we feel USDA’s current soybean estimate is pretty close unless we could get some better numbers in the June, July, and August.

Wheat: Weekly Export Sales

Wheat exports sales are really irrelevant when it comes to the old crop position as it’s going to be ending in two weeks and sales made recently won’t ship in the current crop year but nonetheless we did get 121 tmt sales which is the best number over the last three weeks.

U.S. Weekly Gasoline Stocks

This chart shows gasoline stocks and this year’s stocks are very low compared to last year but also relatively low from a historical perspective over the past 5 years.

EIA – U.S. Weekly Gasoline Demand

The EIA, Energy Information Administration, their weekly gasoline demand numbers coming in around 9.5 mil barrels/day is the strongest number we’ve seen going back to March of last year. The reason we’re pointing this out is that it’s not just ethanol that is seeing strong demand and relatively tight stocks. Gasoline demand is strong and gasoline stocks are relatively low as well.

Grain Market News

24-Hour Observed Precipitation

There were moderate rains in IA, nothing exceptionally heavy but getting 0.5-1.0”. South central MN got some good rains. The rains didn’t encompass the entire belt but they are chipping away at the dry areas. Portions of northeastern ND got rains yesterday as well.

7-Day Observed Precipitation

Most of the southern belt has seen very good rains over the past week. OH has been drying out but they were excessive wet so dry weather in OH is seen as beneficial for helping the wrap up their planting season. The northern and northwestern belt has not seen rain in all areas but portions of some areas have received rains. There are still many dry areas but the forecast does offer additional rain over the next 7 days.

7-Day Precipitation Forecast

The 7-day precipitation forecast does show additional rains for ND, MT, and the southern Canadian Prairie. It also shows additional rains for NE and IA. Most of these rains would be viewed as beneficial. There may be some dry pockets that miss out but we view the dry areas in the U.S. as shrinking, not expanding.

6-10 and 8-14 day Forecast

The 6-10 and 8-14 day forecast continues to show above normal temperatures in the 6-10 and closer to average in the 8-14 day forecast. Precipitation is above normal for the heart of the U.S. corn and bean belt and that above normal precipitation continues into the second week of the forecast. If this forecast is correct it would leave most areas in pretty good shape as we enter June.

Official 30-Day Forecast

Today’s 30-day forecast for June shows above normal temperatures and about average precipitation in the central blet, above average in the east and below normal in the western Plains. Overall we view this forecast as mostly non-threatening.

Long-Lead Forecast for Jun-Jul-Aug

The long-lead forecast for June, July, and August, the heart of the U.S. growing season, shows temperatures about average in the heart, above average in the west and east. Precipitation is expected to be about normal in the heart, wetter in the east, and drier in the Plains. Overall, we view this as mostly non-threatening. This is a long-term outlook and subject to multiple changes but the near-term and long-term forecasts look mostly non-threatening.

July Corn Chart

Corn prices after hitting a low on Monday at $6.33 have rebounded nicely, today closing at $6.64. The short term trend is trying to turn higher on the corn chart and it’s enough to try and turn the technical indicators as well. Overhead resistance currently at $6.84 and chart support down at $6.29-$6.33.

July Soybean Chart

Soybean prices are in a short term downtrend and the technical indicators are still pointed down as well with no sign of bottoming action at least not yet. Soybeans have overhead resistance at $15.74 level and chart support at $14.90. Today’s close at $15.33 is close to overhead resistance and support levels. It will likely be weather that will determine whether we can move higher or lower within this range.

July KC Wheat Chart

Wheat prices are in a downtrend, in fact, a fairly sharp downtrend for the last two weeks. Prices are getting near some fairly significant chart support where we have a double bottom at $6.08 and technical indicators are stuck near zero. This is no place to be making sales with wheat. It’s oversold from a chart perspective and maybe becoming undervalued from a price relationship.