Corn Rises as Brazil Weather Stays Dry
By Kirk Maltais
--Corn for July delivery rose 2.7% to $6.98 a bushel, its
highest close since March 2013 on the Chicago Board of Trade,
propelled by dry weather in Brazil.
--Wheat for July delivery rose 1.1% to $7.26 a bushel.
--Soybeans for July delivery rose 1.1% to $15.43 3/4 a bushel,
its highest close since June 2013.
Bust In The Wind: Dryness in Brazil's growing regions continued
to support CBOT grain futures today, with depleted soil moisture
hurting yields for Brazil's second corn crop. "This looks to be the
driest safrinha growing season in decades, eclipsing the
devastating drought of 2015/16," said AgResource. "Seed genetic
improvement is noted, but the USDA's Brazilian corn production
forecast is easily 10 million tons too high. This is rather
important as export demand will be forced to the U.S. August onward
- which compounds any Midwest weather issues that develop."
Perfect Storm: Progress for planting corn is slightly down from
this time last year, according to the USDA's crop progress report
released late yesterday. The U.S. corn crop is 46% planted as of
this week, down from 48% at this time last year. "Corn is
benefitting from a perfect storm of lower supply and increasing
demand, with a weak dollar and a supersized spec position serving
as strong tailwinds," said Robert Yawger of Mizuho Securities
Chipper Outlook: U.S. farmers are keeping an optimistic view of
the future, amid high prices for row crops. In its latest Ag
Economy Barometer performed by Purdue University and the CME Group,
farmer sentiment was measured at 178 out of 200, up one point from
last month. "The strength in commodity prices continues to drive
improving expectations for strong financial performance, even as
many are seeing rising input costs," said James Mintert, director
of Purdue University's Center for Commercial Agriculture. The
report is derived from a telephone survey of 400 US agricultural
producers performed in late April.
Dwindling Inventories: Another drop in U.S. ethanol inventories
is expected in this week's EIA report, according to analysts
surveyed by Dow Jones. They are forecasting U.S. inventories to
fall to anywhere from 19 million barrels to 19.69 million barrels
for the week ending April 30 - which would be down from 19.74
million barrels tallied in last week's report. If this holds true,
it'll be the 11th straight week that U.S. ethanol inventories have
declined. Meanwhile, U.S. ethanol production is forecast to total
anywhere from 940,000 barrels per day to 960,000 barrels per day,
versus the 945,000 barrels per day reported last week.
--The EIA will release its weekly ethanol production and stocks
report at 10:30 a.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30
a.m. ET Thursday.
--The CFTC will release its weekly commitment of traders report
at 3:30 p.m. ET Friday.
Write to Kirk Maltais at firstname.lastname@example.org
(END) Dow Jones Newswires
May 04, 2021 15:23 ET (19:23 GMT)
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