4/9/2021

The wheat market finishes the week strong and posts their first week of gains since mid-February. Daily and weekly charts have found strength following a bullish week across the rest of the grains as well as a few weather concerns. The KC wheat complex finds a weather premium in the cold temperatures forecast for much of the US wheat areas this week as the crop is freshly out of dormancy. Spring wheat posts a 54.5 cent gain on the week as the market factors in a continued drought in the northern plains while also trying to offset expanding corn and soybean acres in the weeks to come. Friday’s WASDE did not provide many changes in wheat’s domestic balance sheet however global wheat carryout was lowered 5.6 mmt on higher consumption and smaller supplies. 
The USDA had a few surprises on their updated old crop balances sheets this morning. They finally acknowledged our strong export sales and shipments and raised the export estimate by 75 million bushels. They also raised the feed use by 50 million bushels, a number that seems high to some analysts, and ethanol by 25 million bushels. The corn carryout number dropped to 1.352 billion bushels from 1.502 billion bushels in May. That puts us at a 9.2% carryout-to-use, which doesn’t leave a lot of room for error in the coming months. One big thing to keep an eye on is precipitation in South America, and the size of the Safrinha corn crop out of Brazil. 
Look at the continuous front-month corn contract above, and you can see that post-report today we hit highs at $5.95 on the May futures contract. We are getting back to levels we have not traded on the nearby futures since 2013, if you have corn in the bins or in the elevator look at some targets to put orders in at. The December 2021 board finally broke through $5.00 after the report and traded up to almost $5.04 before selling back down to under $4.97. As we get close to planting season, look for orders to place above the current market as weather premium will more than likely get built into the futures prices in the next few months. 

Hope everyone has a great weekend! Give us a call at 308-487-3325 for marketing ideas and information.