Charts of the Day – June 11, 2021

Corn
Soybeans
Chicago Wheat

Afternoon Market Commentary – June 11, 2021

by: Chris Betz

Corn Soybean Wheat
Old Crop (futures month, change, settle price) CN1 14’4 684’4 SN1 35’4 1508’4 WN1 3’0 680’6
New Crop (futures month, change, settle price) CZ1 6’6 609’6 SX1 20’6 1438’6 WN2 4’4 693’0

Technical Thoughts – June 10, 2021

By: Ken Lake

WN21 is looking pretty sketchy here. The 20-day moving average has dipped below the 50-day moving average. There is stiff resistance at 680. Fast stochastics is offering a sell signal. Seeing no supportive fundamentals near term, farmers needing coverage should sell here.

The current cash bid structure does not offer much incentive to store this crop. Buyers, predictably, are offering firmer bids in the spot market than in the deferred slots. Our general advice should be to sell unpriced wheat off the combine.

WN22 isn’t as bearish, however, the contract did put in a double top at 714. Stochastics is offering a sell signal. Farmers should advance sales in the 2022 crop.

And what about wheat for 2022? Well, the weekly Wheat:Corn ratio chart below favors corn which means we should see wheat acres give way to corn (and soybeans, likely) in 2022.

Fertilizer Update – February 23, 2021

By: John Ezinga

As your inside planning for the coming year, it might be a good time to make sure your fertilizer needs are covered. There is a case on all three major ingredients for significantly higher prices and/or outright shortages.

Below are some charts you have seen from me over the years to help you decide timing decisions on purchasing your inputs. Note that they have all moved from the green “buy zone” to the neutral or red “caution zone.  With corn, soybeans and wheat all recently setting new highs you can bet the fertilizer manufacturers will want to keep marching prices higher to match. These charts can help you manage your spreads of your inputs and outputs…it is good practice to manage your spreads for long term profitability.

Nitrogen
28%  and Urea have been very volatile over the past 6 weeks. We went into year end with good forward contracting at good relationships with corn. Nice job by the farmer to take advantage of that spread.

As we entered January the prices quickly found there legs and marched higher to the tune of around $100 a ton in urea and $60 bucks up on 28%. Currently nitrogen producers are finding more profitability in selling their contracted natural gas into the home heating market.  So as production is shut in for the cold weather spot shortage may hamper demand if spring were to break all at once. We are weeks away from demand in the south and this will test the depth of the N market. If you see price spikes in March it will certainly lead to supply constraints for us in the north come May. US prices are below world values so I would expect prices to remain firm right thru planting on both products. As you can see from the charts below there is still plenty of room to run up prices without getting way out of line compared to past ratios.

28%

Urea

MAP and 10-34-00
So the story behind this one is simple. Mosaic asked for tariff protection from good old Uncle Sam and of course during an election year he will oblige. Tariffs were passed and we had a record spring/fall usage season and now Mosaic is crying they don’t have production to meet demand (big shocker!!) Prices have screamed higher since mid-December, going from $375 for fall application to well over $600 for spring delivery. The liquid side of the market came late to the party but 10-34-00 has climbed from $325 to $550 in the last 20 days!! Again I urge you to confirm with your supplier on availability of your inputs. I do not see relief for this market and would not be surprised if it rallied a bit more if corn does the same.

Potash
The rally in potash started in the summer of 2016 when potash bottomed out around $250 ton. Prices have been steadily moving higher over past 4 years and then caught a real bid this January as end users looked to refill for spring. There have been no supply constraints with potash….it is a marker where supply is controlled to keep new production from coming online. Canadian producers lost track of demand and looked up to see that the barns were all emptied last fall and the logistics to fill them by spring were impossible. So the cure became higher prices to ration demand(go figure)! Whether or not they can refill by spring is still in the air but I expect the perception of shortages has already achieved its objective of higher prices. Nutrien who is the 800 pound gorilla formed when PCS bought Agrium (who owns CPS) raised prices $50 bucks last week and would you guess…Mosaic followed right in their footsteps to match the price increase!(who says there is no competition? LOL) As you can see from chart below there is lots of room yet to the upside in potash and be too far out of line. My guess is they will press this higher every chance they can as long as corn keeps rallying.

I do not expect any major supply issues in the micros and or sulfur products.

If you have not bought your inputs yet you may decide to pull some nutrients from the soil bank or at a minimum only spread removal values. Whichever you decide keep the idea of spreading Pell Gyp in your mind. Getting sulfur and calcium out in a plant available form that also helps utilize existing P and K in your soils is a cost efficient strategy in years where fertilizer prices have got out of hand.  Spreading 200# per acre cost about $22.50 and gets you your needed 34# of actual sulfur and 42# of actual calcium.