5/7/2021

Rampant speculation abounds in the grain markets as the most-trade July corn and soybean contracts surged to multi-year highs this morning, though some profits have been taken since. The key new-crop December and November contracts, respectively, have been doing a better-than-expected job of keeping up heading into the late spring and summer months. Part of that comes from said May S&D where old-crop carryout is expected to tighten and keep carrying snug for the upcoming season - both crops will need to add acreage or increase yields to create some breathing room.
However, dry conditions in the northern Plains and northern/northwestern Midwest have farmers there uneasy as well, with needed rains slow to arrive for germination after planting into the dust in many areas. Upcoming weekend rains are seen mostly sliding south into the heart of the belt, with a similar pattern for the 6–10-day period as well. Commodity Weather Group is equally skeptical of forecasted 11–15-day precip also. The current Drought Monitor shows increasing dryness creeping from the west into southern MN, IA, and beyond. Moreover, USDA daily reporting showed another 1.36 MMT of corn sold to China, this time for the 2021/22 marketing season...
 
Old crop wheat export sales were not great Thursday, but this should not be unexpected with the rally in the flat price putting US wheat well out of the export mix. Wheat basis is starting to firm up in the US domestic market. HRW demand from millers now must compete with feeders.

 We hope everyone has a great weekend!