CBOT agricultural futures close mixed
CBOT agricultural futures closed mixed with rallies in corn and wheat while soy futures closed slightly lower. The World Agricultural Supply and Demand Estimates (WASDE) report released by U.S. Department of Agriculture (USDA) on Friday was neutral to positive to the market.
Chicago-based research company AgResource maintains a bullish view.
CBOT corn futures ended 11-16 cents higher in the week. There is no sign that U.S. corn export demand will be slowing. Additionally, the weekly U.S. ethanol grind will reach 2019 levels by early May.
WASDE report provided a token 150-million-bushel hike to U.S. demand. AgResource maintains that ultimately USDA will print a total 2020-2021 corn consumption figure of more than 15.2 billion bushels.
AgResource holds that actual concern over corn supply shortages must develop before such a rally occurs. Corn is the most bullish grain at CBOT and the deepening drought for Brazil’s winter corn crop is becoming extremely worrisome.
U.S. wheat futures ended 22-59 cents higher as weather issues plague North American spring wheat production potential. USDA’s April WASDE was mostly a non-event for wheat, but AgResource does note that global consumption and trade will be record large in 20/21. A new global consumption record will be set in 2021-2022 as economic growth and international tourism resumes and as Chinese imports stay elevated.
Wheat has formed an early seasonal bottom amid spring wheat weather issues and record supply tightness in Europe. Concern over global corn supply availability lends further support, AgResource said.
Soybean futures finished the week unchanged. The April WASDE report did not offer any surprises. The USDA’s April balance sheet estimate was simply a matter of reallocating demand with end stocks held unchanged at 120 million bushels.
With export commitments more than 99 percent of the March WASDE, the USDA raised the export forecast by taking supply from the domestic crush industry. But with Central U.S. cash crush margins above 1 dollar per bushel, the U.S. crush will not slow anytime soon.
Harvest in Brazil is winding down and export basis is pushing higher. Brazil is exporting record tonnages of soybean with China, the main buyer. Brazilian April soybean exports could surpass 15.5 million metric tons.
A tightening U.S. cash market and impossibly tight new crop U.S. soybean balance sheet will curtail selling at CBOT. AgResource holds that November soybeans have support below 12.50 dollars with any modest Midwest weather concern sparking a rally to 13.50-14.00 dollars, and May soybean may find support at 13.75 dollars.