May CBOT wheat added 5-3/4 cents this week to close at 547-1/2. For the month of February, front-month corn was a 1/2 cent higher. CBOT December 2021 corn traded to a new contract high while adding 10-3/4 cents this week to close at 470-3/4. Weather forecast discussion here in the US will begin to gain steam in the coming weeks as planting is just now beginning in the far southern US. The one-month outlook from the CPC is calling for above-normal temperatures across much of the corn belt with a wetter leaning bias for the eastern half of the Corn Belt. Weekly US corn export sales were only 17 million bushels this week, a marketing-year low and well below expectations. A large cancellation from “unknown destinations” was a large contributing factor to the disappointing net sales number. Seasonal patterns suggest a lower futures trend into Brazilian harvest and planting here in the US.
About a third of Mato Grosso’s (Brazil’s largest corn-producing state) 2nd crop corn will be planted outside of the ideal window which closes this weekend. This has never happened before in Brazil and will account for a huge number of acres as record plantings are expected. 2016 was the last time Brazil’s corn crop was planted later than ideal, drought conditions that year dramatically reduced yields. Wet weather has been the issue in 2021, preventing timely harvest of soybeans and following plantings of 2nd crop corn. Much like here in the US in the spring of 2019, the financial incentive in Brazil to plant corn will push farmers to plant late.
Recent research has suggested that natural mutations of the African swine fever in China might be causing a milder, less deadly form of the disease in pigs, but it is potentially harder to detect and more difficult to control. The paper by a team at the Harbin Veterinary Research Institute under the Chinese Academy of Sciences is the second this month to report on natural mutations in the virus which ravaged China’s pig herd during 2018 and 2019 and continues to kill pigs in the world’s biggest pork producer. China’s mammoth demand for corn and soybeans has been led by a continued rebuild of their hog herd. A slowing of this growth would surely clip the wings of at least some demand.
Despite trading mostly lower on Friday, the Class III market had a pretty good day overall. The market was able to shake off some selling pressure in the spot cheese trade and hold onto most of Thursday’s gains. April Class III was up 75c yesterday and tacked on another 3c today. May Class III was up 57c yesterday and fell just 7c lower today. Each class III contract from April 2021 to December 2021 is within striking distance of the $18 level, with a couple contracts actually surpassing that mark at one point today. Market sentiment has improved after the January milk production report showed production growth up just 1.60%.