ACI Market Commentary 4/16/2021
Apr 16, 2021
Corn market tells soybean market to “hold my beer” after a BULLISH USDA Prospective Plantings report. Farmers in the U.S. reported intentions of planting a mere 91.1 million acres of corn vs. expectations of 93.2m by industry analysts. With old crop stocks dwindling and SAFRINHA crop in trouble, risk-on trade takes this thing to levels not seen since 2013. Locally we are forecasting very generous returns for anyone getting geared up to plant fence row to fence row corn this year (much better returns than wheat in Dallas’s opinion). We still have plenty of corn seed and fertilizer available. Call if you would like to discuss switching acres from wheat to corn.
WE LIKE THE CROP.
WE LIKE THE REVENUE PER ACRE.
WE LIKE THE UPSIDE.
WE LIKE THE CROP.
Soybeans continue to post new highs as well as the market assesses old crop stocks (or lack there-of). With Brazil online for exports, U.S. exports come to a stop. Processor bids screech higher as the market tries to buy what soybeans still are in the countryside. New crop values have stayed in check considering the potentially BULLISH 21/22 carry outs.
Spring wheat futures have finally joined into the fun with a 50+ cent rally in recent weeks. Trade focuses in on a weakening U.S. dollar and droughty conditions in much of U.S./Canadian HRS growing regions. Acres continue to shift away from wheat as farmers see higher returns in canola, corn and soybeans. While stocks to use ratio for spring wheat is still at a burdensome 42%, the stage is set well for any adverse weather to lead to higher prices.
U.S. stocks continue to climb higher as the market digests corporate earnings and economic reports. DOW and S&P indices are trading at all–time highs as we continue to see jobs come back and the economy reopen. Last BLS release shows non-farm payrolls jumping by 916k in March. Focus now shifts towards Joe’s $2T infrastructure plan. Feels like risk assets are in style as we continue to take this thing higher.
One Last Thing:
I’m bullish, you’re bullish, even your landlord is probably bullish. At the end of the day, we all need to remember that low prices cure low prices just as well as high prices cure high prices. We strongly encourage taking some risk off the table as the crop gets planted in the coming weeks. Please call your local merchandiser to discuss a plan that works for your farm.
Have a good weekend!
Grain Team – Aaron, Brentt, Connor, Dallas, Hank, James, Jenna, and Kevin