March CBOT corn futures added 1-1/2 cents this week to close at 548-1/2. December futures added 6-1/2 cents this week to close at 451-3/4. Net US export sales for corn crushed weekly records last week as 7.4 million tons (292 million bushels) of corn were sold for the 2020/21 marketing year. China was by far the largest buyer picking up over 5.8 million tons of the 7.4 million total. We are now 43.3% of the way through the marketing year for corn, export sales on the books as of 1/28/21 have reached 83.3% of the USDA’s estimate. This is excessively above normal for this time of the year, but these sales must turn into shipments soon. Only 36% of US corn sold for export in the current 2020/21 marketing year have been shipped as of January 28. This is by far the lowest export pace since at least 2005. It will take a logistical feat to export the record number of corn sales on the books by marketing year-end in August.
While the trade will be watching the February WASDE report on Tuesday the 9th, focus has been and will continue to eye the March planting intentions report for the USDA’s first guess at 2021 corn and soybean acreage. A Farm Futures survey conducted last month of 806 farmers showed favor towards higher corn acres, relative to soybean acres, early on in 2021. Farm Futures is estimating producers will increase corn acreage 4.1% from last year to 94.7 million acres in 2021. Many producers surveyed took advantage of three-year lows in wholesale nitrogen prices late in 2020 to lock in inputs. 94.7 million planted acres of corn would be the third-largest ever for the US falling shy to only 2012 and 2013.
Chinese scientists have found a natural mutation in the African swine fever virus they say could be less deadly than the strain that decimated the world’s largest pig herd in 2018 and 2019. Reuters reported last month that at least two new strains of African swine fever had been found on Chinese pig farms, which appeared to be man-made from illicit vaccines. The researchers at the Military Veterinary Institute in Changchun said there appeared to be a growing trend of lower mortality from African swine fever with more clinical symptoms that are not easy to detect and difficult to control. A setback in China’s hog herd rebound could slow their thirst for corn and soybeans.
Stimulus Bill Pushes Cheese Higher
This week started off pretty slow in the dairy markets as futures mostly chopped around as the spot cheese market traded only 0.75 cents higher in the first four days of trade. But, the passing of the recent stimulus bill sent the market surging higher as the market is expecting more support from government purchases to come into the market. The surge from the last farm to families extension only lasted for a couple of weeks before it failed so we will have to see if the recent injection into the market can keep prices elevated.
The spot cheese market took no time at all to start moving as it traded 8 cents higher on the block/barrel average on Friday. To see a confirmation of a breakout higher you would need to see the block/barrel average pushing above $1.75/lb, the area where the previous rally failed. When looking at the 2021 calendar year average the market finished about 40 cents higher on the week at $17.16. The Class IV market remained relatively stagnant as powder prices traded lower and butter prices worked higher.