By Carrie Muehling
PEORIA – Monday was a strong day for corn, soybean and wheat markets with export shipments and South American weather supporting the trade.
This week’s export shipment numbers for corn were the largest in 18 weeks at 21.1 million bushels, compared to average guesses of 17 million bushels. Soybean and wheat shipments were also in line with or above expectations.
“Really, all three commodities had a strong week for what was shipped out in the export market,” said Brad Matthews, market advisor with Water Street Solutions.
Matthews said while it was good to see those shipments go out, corn exports have been very poor this year. He believes the export scenario is another reason to pay attention to what’s going on in South America, as farmers there expect to raise a significant soybean crop.
“If they really do have that big of a bean crop and the world is going to South America for beans, are they going to have the capacity to be able to also export corn?” asked Matthews. “It might be hard for them to be exporting corn if they’re going to be exporting that many beans. If that’s the case, we should see more of that demand shift back our way because South America is unable to actually ship it.”
The trade is also watching South American weather, as this is a key time in the growing season there. South American farmers enjoyed good weather until about two weeks ago, but things are beginning to turn warm and dry, according to long term forecasts out Monday afternoon.
“The 6-10 day outlook for Argentina was warmer and drier, so we’re starting to build in some premium for these markets,” said Matthews.
Other demand factors include ethanol and feed usage. A few ethanol plants have shut down because of a lack of ability to find corn. That has been reflected in the ethanol grind over the last few weeks. Matthews said ethanol demand might need to be adjusted going forward if that trend continues. Feed is the other big part of the demand equation, but usage there is more difficult to judge because the numbers come out quarterly instead of weekly. USDA reported stronger feed usage than expected in the most recent report, but cattle numbers continue to shrink and a Texas beef processing plant announced its closure last week.
Carrie Muehling can be reached at email@example.com.