By Doug Tenney, Leist Mercantile
The monthly USDA WASDE Report is on March 9. Traders and producers will be most anxious to learn if U.S. corn and soybean exports will increase compared to the February report which projected corn exports at 2.6 billion bushels, while soybean exports were pegged at 2.2 billion bushels. The trade was most disappointed with the February WASDE Report. Some analysts suggested USDA “punted until March or April,” when corn exports were not increased to the degree of expectations. It appeared USDA desired to gather more information regarding South America corn and soybean production in spite of dry weather conditions during December and the first five weeks of 2021.
The second and third USDA reports this month will be on March 31 when the Prospective Plantings Report and Quarterly Grain Stocks Report are released. It seems a forgone conclusion U.S. corn and soybean acres will be above those planted in 2020. Traders are expecting U.S. corn acres to be somewhere between 92 million and 93 million acres. This year U.S. soybean acres are expected to be near 90 million acres. Strong world demand for soybeans implores U.S. soybean acres to climb compared to last year.
The Quarterly Grain Stocks Report will be closely watched for both corn and soybeans. It will provide significant information to answer the months’ old need for demand to be rationed. U.S. monthly soybean crush set numerous monthly and all-time highs from October 2020 to January 2021. It was suspected the U.S. February crush could set another all-time monthly high. Corn stocks will be watched closely as USDA projections for lower feed demand make little sense when U.S. animal numbers are above those of last year.
Old corn with the May 2021 CBOT contract made new contract highs on the Feb. 9 report day but failed to exceed that price the remainder of February. In contrast, December 2021 corn made new contract highs several times late in February, struggling to keep pace with increases seen for November 2021 soybeans. Producers holding old corn are hoping for prices to move even higher to make up for soybean prices received at harvest. During the last two weeks of February, May and November CBOT soybeans made new contract highs on multiple days. In addition, the last week of February, November CBOT soybeans reached $12.5275 which permitted producers across much of Ohio the opportunity to flat price fall 2021 soybeans at the $12 mark.
U.S. corn exports are expected to be strong into May as sales have been above the 5-year average for months. China has been a strong buyer of U.S. corn in 2021 in spite of low import numbers projected from USDA. In fact, from December to February much of the trade had U.S. corn sales to China above USDA projections for corn imports from all sources.
Ohio corn and soybean producers have a March 15 deadline to make crop insurance decisions for 2021. Corn this year has a price of $4.59 compared to $3.88 for last year. Soybeans this year have a price of $11.87 compared to $9.17 last year. Crop insurance rates per acre will be up over 30% compared to 2020. Higher volatility rates were seen for both corn and soybeans with volatility determined the last week of February, while prices are averaged during the entire month of February.
Snow across much of Ohio the second and third weeks of February provided the opportunity for much needed sub-soil moisture levels to be recharged. However, grain movement was hampered as producers were forced to wait for snow to melt in order reach grain bins in isolated locations.
Expect grain prices the next two months to have wider swings as daily ranges could easily be bigger than historical levels.