Solid gains on the heels of macro market influences this week. Fundamentally, the weather has turned more agreeable to crop progress through much of the Corn Belt and there is still a lot of grain in the US to be marketed. Therefore, we are left with money flow and South American weather to drive our markets. This week chatter, and photos, of Argentinian soybeans sprouting in pod due to rain-delayed harvest took over social media and pushed the soy market higher. Fund money moving around the commodity space was seen as a primary driver for the corn market. Another contributing factor for corn has been the continued strength in weekly export sales pushing the cumulative sales to 26.8 million tons, a 4.5 million ton increase compared to this time last year.
Despite a general focus on spring field work, rallies in corn and soybeans this week caught the attention of producers across the country. As a result of the massive cash movement, basis levels in corn and beans both too a hit in most areas. Corn basis was seen as generally two to three cents lower at most terminals and processors. Soybeans took a larger hit with old crop down five to eight cents and new crop down five to ten in many locations.
Where to from here? Some indications point to a short term correction, however the intermediate term trend looks to be mixed. Corn only breached the high end of our recent range today after recovering the planting intentions report losses. The soybean trend looks to continue higher with month with six of the previous seven weeks closing higher since the low was set at the end of February.
Given the variability of price movement, now is the time to have pricing orders in place with the grain department to avoid missing an opportunity while we all start to focus on better weather and spring planting season.
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CHS – Rochester Grain Team
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