The Good: Since bottoming out six weeks ago, U.S. ethanol production hit 837,000 barrels last week. Although this is still significantly lower than the 1,057,000 barrel average this year prior to the pandemic, production has now recovered close to two thirds of the drop due to lost demand. Ethanol stocks declined this week, despite the increased production. All of this adds up to increased demand for corn in the coming weeks as the U.S. economy continues to move back to more normal levels.
The Bad: Wheat markets were under pressure today with Minneapolis futures closing down four to five cents per bushel. With harvest advancing in the winter wheat states of the U.S., spring wheat is having a difficult time in breaking out of the channel between US$5.00 to US$5.30 per bushel that has been established during the past two months.
The Ugly: Although the conditions in Australia are good for planting the 2020 crop, Argentina has been dry and planting has been delayed in some areas due to the dry soil moisture conditions. The crop in Argentina is about 45 per cent planted, but the dry conditions are beginning to slow progress. Argentina was expecting to plant a record 7.0 million hectares this year. When combined with the large increase in Australian planting, there is a possibility that the Southern Hemisphere will produce close to a record crop in 2020-21.
The forecast is not calling for much in the way of relief for Argentina in the coming week, with below normal precipitation expected in all areas except for parts of central Santa Fe province.