5/5/2021

The markets will themselves higher again with July corn trading a contract high of 0712 and closing above the 0700 level after failing to do so the previous two trading days.  The front month contracts for corn and beans were trading steady at 5 lower for a portion of the morning before surging higher during the last 2 hours of the session.  With trade leaning ever-bullish based on weather in North and South America, new crop values have been on a mission this week, so far.  The spread between the July and Dec corn tightened about 11 cents today and, more impressively, the Nov 21 bean contract and has gained roughly 35 cents on the July since market close last Friday.  We had some 8am flash sales/cancellations this morning; 184,100 tonnes of corn to Mexico for the 21/22 marketing year, 147,320 tonnes of corn to unknown split between the 20/21 and 21/22 marketing years, and a cancellation of 140,000 tonnes of corn to China for the 20/21 marketing year.  Weekly ethanol numbers showed a production increase of 7,000 barrels per day to 952k bpd.  Ethanol stocks also increased 704k barrels to 20.44 mln.  The question everyone has right now: How high are we going?  We've risen so fast in such a short time frame that the market needs to take a breather for us to even get a rough understanding of where we truly need to be.  End-users (ethanol, soy processors, livestock, etc) have profitable margins right now and there's no benefit or incentive to them to stop using corn and soy products.  The market's job is to ration demand, so until one or more segments of the industry turn to negative profit margins, the bulls are in full control.