Overnight Market Report- 4/20/21- Corn Pushes $6, Soybeans Surge Higher


Grains markets pushed higher once again overnight with May corn testing the $6 for the first time since 2013 while soybeans surged once again with May pushing $14.75 on the board. With corn, the May contract is losing open interest as it approaches delivery at the end of this month, but traded as high as $5.99 1/4 early Tuesday, challenging the $6.00 mark again for the first time since 2013. Several cash bids near $6.00 or higher are found on DTN’s Market Tracker in Iowa, Minnesota and South Dakota — areas not normally known for strong basis this time of year. Late Monday, USDA said 8% of the corn crop was planted and 2% of it has emerged, in line with the usual paces. Illinois is 12% planted and Iowa is at 4%. Obviously, even if weather cooperates, it is going to be a while before new supplies come to the rescue of so many needing to buy corn now.

In soybeans, the May contract carries a roughly 14-cent premium over the July with delivery coming the end of this month. It’s not uncommon to find cash prices bid above the futures board in Illinois and Indiana, but Tuesday’s morning bids are near or above even money as far west as western Iowa and southwestern Minnesota — more signs of remarkable demand for soybeans. Late Monday, USDA said 3% of the soybean crop was planted, slightly ahead of the five-year average of 2% for this time of year. Illinois and Ohio are 5% planted and Indiana is at 4%. This week’s colder temperatures are not enticing for planting activity, but there is plenty of time for conditions to improve. This year’s concern is not so much about crops getting planted, but finding enough moisture after they are planted, especially in the western Midwest where conditions are expected to be drier.

On China’s Dalian exchange, September corn was down 0.2%, July soybeans were up 0.3%, September soybean meal was up 1.1% and September soybean oil was down 0.1%. July common wheat on China’s Zhengzhou exchange was unchanged. June Malaysian palm oil is trading up 1.9%.

The bandage was not large enough to stop the bleeding Monday. Live cattle futures slowed their descent, but pressure from feeder cattle still pushed them into negative territory for the eighth day. Futures washed out early but rebounded substantially from the lows. This might signal that futures have fallen low enough to catch the interest of traders to buy back into the market. After all, cash has remained strong with no indication of what this week may bring.

Hogs completely diverged from cattle Monday. Triple-digit gains were seen in all contracts through July 2022. The temporary liquidation phase ran its course with futures regaining most of the losses of Friday. The market has a ways to go to regain the losses of last week, but the strength Tuesday certainly seems to indicate that this may take place sooner rather than later. Higher cash and higher cutouts continue to unfold as strong demand and tightening supply permeates the market.