Grain Market Update – April

Aurora Cooperative 8 months ago


We had the quarterly stocks number from the USDA Friday March 31st. Corn stocks were slightly higher than expected. However, stocks are still 350 million bushels shy of this time last year. May futures lead the way higher on Friday and closed up double digits at $6.585. This is the highest price for May futures since February 23rd. May corn is up about $.50 cents since the lows back on March 10th, this rally has mainly been in the front months (May and July) as we have seen spreads start to do some work to keep corn moving. The May/July corn spread started off the month of March at a 10-cent inverse and closed the month at +24.5 cents. As field work and planting ramps up, the market is doing what it needs to, to get corn moving today. The CK23/CZ23 is around $.90 cents inverse today. Last Friday we also received prospective planting acres and the USDA is estimating we plant 92M acres of corn this spring. This is a large increase over the 88.6M projected this time in 2022. December corn has not had quite the excitement that old crop has had over the last 30 days. December corn has had a 26-cent range over the last month, from $5.735 to $5.475. We are currently at the high end of the range trading $5.70 today. Premium offer contracts have become more popular recently with increased volatility and we are starting to see new crop sales pick up. The market will put this report in the rear-view mirror and shift to watching the US weather and planting progress now.

With cash inverses near $1.50 it can be difficult to make marketing decisions today for the corn being planted. If you take a step back, how many chances have you had to sell $5.70 new crop futures before the planters are moving? I believe it’s a good time to make some sales and take some risk off the table. Talks of 2013 are everywhere, I believe that each year is its own story, but I don’t get a warm feeling while comparing the technical behind the crop years. In 2013 the high for CZ13 was made on January 2nd above $6.20 and went off the board in November around $4.20.  So far in 2023 the high was also the first day of the year just north of $6.00. I’m not going to say we are heading to $4.00 corn this year, but as the farmers start to get in the field with very little new crop sold, I believe the risk is greater than most producers are giving it credit for.

Soybean stocks came in slightly higher than the average trade estimates and Acres were the same as 2022 at 87.5 million acres. However, the market responded very friendly and old crop beans closed +30 on Friday at $14.755. We are continuing that strength today as both old and new crop beans are having double digit green days. Old crop Beans had been beat up the week prior trading as low as $13.8375 before rallying the past 7 trading days, to about $14.95. New crop beans had a very similar story over the past 30 days trading as high as $13.81 on March 3rd all the way down to $12.475 on the 24th. Currently November futures are around $13.30. Bean crush and demand remain very strong and with an almost $2.00 cash inverse into new crop the market is saying move beans and move them now.

Sam Johnson

Grain Hedge Desk Manager