By Steve Freed, VP of Grain Research April 25, 2021
Grain calls are mixed to higher. SK is near 15.39. SN is near 15.16. SX is near 13.41. SMK is near 422.4. BOK is near 62.71. CK is near 6.55. CN is near 6.32. CZ is near 5.59. WK is near 7.10. KWK is near 6.74. MWK is near 7.18. Soybeans are called 4-6 cents higher. Corn and wheat 2-4 cents higher.
Last week, Goldman Commodity Index tested recent highs near 494. Higher markets in energies, grains, and metals helped push the index higher. Most feel Index will make new highs. US Dollar is trending lower on concern about higher US debt. Lower Dollar and concern that US stocks will also trend lower could increase speculative buying in commodities. Higher demand for raw materials and food could also help the Index. Less and ideal World 2021 weather could also push grain prices higher. Higher US domestic corn and soybean basis levels, talk of light May deliveries, dry Brazil and US north plains and Canada prairie weather could support grain futures. The good news is that rains are forecasted for parts of EU and Black Sea.
Last week, corn futures rallied 70 cents and the largest weekly gain since July 2012. Higher cash basis supports SK and SN. Some feel CZ is too low. CZ could test 6.00 on less than perfect US spring and summer weather. Some feel dry weather this summer in west Midwest could eventually push CZ over 7.00. Soybeans also tested 8 ½ highs. SK tested 15.50. Higher US cash basis and positive US crush margins continue to tighten US 2020/21 balance sheet. There is talk that US will need to import Brazil soybean and soyoil to finish this market year. Soymeal basis levels are lower on futures rally. World vegoil prices continue to trend higher. Some concerns about the seasonal increase in palmoil production could offer resistance. Talk of US soyoil as biofuel for jet fuel offers long-term support. Wheat futures have been a follower to corn and near 8 year highs. Higher CN to near 6.75-7.00 could suggest any KC futures may be cheap below 7.00. Concern about dry US north plains and Canada prairie 2021 weather offers support to MLS spring wheat. Wheat like corn and soybean will need perfect 2021 World weather to keep futures from trading higher.
The next key fundamental for traders will be May deliveries and USDA May supply and demand report.
7 Day QPF forecast