Soybeans close 9¢ higher | Wednesday, March 24, 2021

Acreage estimates and planting weather eyed, analyst says.

On Wednesday, the CME Group’s farm markets lean on the strong soybean market for direction.

At the close, the May corn futures settled 2¢ higher at $5.53¼. July corn futures ended 3¢ higher at $5.37¼. New-crop December corn futures closed ¾¢ lower at $4.69.

May soybean futures closed 9½¢ higher at $14.32¾. July soybean futures ended 9¾¢ higher at $14.21. New-crop November soybean futures settled 4¾¢ higher at $12.28¼.

May wheat futures finished 10¢ lower at $6.24¼.

May soymeal futures closed $2.20 short term higher at $401.00.

May soy oil futures closed 0.46¢ higher at 57.48¢ per pound.

In the outside markets, the NYMEX crude oil market is +3.28 higher (+5.68%) at $61.04. The U.S. dollar is higher, and the Dow Jones Industrials are 174 points higher (+0.54%) at 32,598 points.

Bob Linneman, Kluis Advisors, says that investors will be watching planting weather closely, as April approaches.

“The trade is building in a large 183- or 184-million-acre combined corn and soybean acreage estimate for the U.S. this year. However, even with these record acreage projections (and trendline yields), ending stocks do not increase to burdensome levels in the next marketing year. Prices will be well-supported on any setback,” Linneman stated in a daily note to customers.

Linneman added, “Watch the extended forecasts for Brazil. Several of the weather models now indicate hot, dry conditions in late March and early April. This could be a big problem for the double-crop corn that was planted so late this year.”

Pryscilla Paiva, Canal Rural meteorologist, says that widely scattered showers maintained overall favorable conditions for emerging second-crop corn in key producing areas in Brazil, during most of the month of March.

For the next 15 days, weather forecast models indicate that Brazil’s corn crop could see scattered showers and average accumulated rain over 10 inches in much of the region between major producing areas, including Mato Grosso do Sul, Mato Grosso, Goiás, and Paraná.

“The analysis of atmospheric patterns shows that the combination of South Atlantic Subtropical Anticyclone (SASA), a zonal flow of subtropical jets, and the humidity concentrated in the northern and extreme southern portions of Brazil are the main drivers for the upcoming conditions. The exception may occur from April 2-5, when the SASA is expected to decrease rapidly, and a cold front advances throughout Brazil’s coast causing unstable atmospheric conditions with chances of rainfall over 10 inches for isolated areas in Paraná, Central-West and Southeast Brazil,” Paiva says.

On Wednesday, the Energy Information Agency (EIA) released its weekly U.S. ethanol production estimates.

According to EIA data analyzed by the Renewable Fuels Association for the week ending March 19, ethanol production dropped by 5.0%, or 49,000 barrels per day (b/d), to 922,000 b/d, equivalent to 38.72 million gallons daily.

Ethanol production remained 8.3% below the same week last year. However, the four-week average ethanol production rate increased 7.7% to 920,000 b/d, equivalent to an annualized rate of 14.10 billion gallons (bg), according to the Renewable Fuels Association press release.

Ethanol stocks grew 2.2% to 21.8 million barrels, which was 9.7% below a year ago. Inventories built across all regions except the Midwest (PADD 2).

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Tags: soybean futures, corn futures, CME Group's farm markets