Floor Talk February 19, 2021
At the close:
At the close, the March corn futures finished 7 1/2¢ lower at $5.42 1/4. May corn futures settled 7 1/4¢ lower at $5.41 1/2. New crop December corn futures closed 3/4¢ higher at $4.60.
March soybean futures finished 2 1/4¢ higher at $13.77. May soybean futures finished 3 1/2¢ higher at $13.80. New crop November soybean futures closed 9 3/4¢ higher at $11.96 1/2.
May wheat futures finished 9 3/4¢ lower at $6.55 3/4.
May soymeal futures closed $1.40 short term lower at $423.60.
May soy oil futures settled 0.64 higher at 46.89¢ per pound.
In the outside markets, the NYMEX crude oil market is $1.55 per barrel lower (-2.56%) at $58.97. The U.S. dollar is lower, and the Dow Jones Industrials are 26 points higher (+0.08%) at 31,519 points.
Britt O'Connell, ever.ag, says that today brought some very interesting spread trading to the grain markets.
"Yesterday the USDA held its annual Ag Outlook Forum and with that a swing at how the 2021 balance sheet could play out. It is important to remember that the outlook forum is not an official USDA estimate, it carries a very forward looking economic view rather than our March 31st planting intentions which will include farmer survey and boots on the ground data. Planted acres were pegged at 92 and 90 million acres respectively for corn and soybeans. Yield estimates used are very vanilla - trendline with demand in both corn and soybeans having a very strong showing, particularly in the exports category," O'Connell says.
She added, "Apparently, the USDA believes that China's corn purchases are here for at least another year , who am I to say they aren't right. The big takeaway for me is the balance sheet appears if it will remain tight with little to no room for error in yield. Soybeans need every bit of the 4.525 billion bushels of production to simply tread water and told at today's pipeline levels. Will corn work itself ahead of corn and ensure itself these acres? Today the ratio has remained firmly planted at a neutral 2.5:1. There was no bearish news for new crop, but with today being first notice day and option expiration, things tend to get a little sloppy," O'Connell says.
What say you?