A seasonal weather premium rally is beginning to take hold for corn and beans.
I encourage buying dips. Demand and the uncertainty of weather is the new seasonal market motivator. The May 10 USDA crop report is expected to cut ending stocks of corn and beans and raise export projections. April's increase in exports was measurably greater than the month prior:
- April corn exports were 568 thousand metric tons (tmt) over March
- April bean exports were 600 tmt over March with old and new crop combined
Friday's 1.4 million metric ton purchase was the sixth single largest daily purchase ever. This makes this growing season one of the most important in many years.
China's demand is helping to push a record export pace in the U.S. Last week, China was in for 2.8 million metric tons of U.S. corn. China's corn production shortfall and record 690 million head hog herd to feed has the country active in U.S. ports. Cumulative corn sales stand at 83.3% of the USDA 2011-12 marketing year forecast versus the five-year average 8.3%.
- On April 18, July corn ended an April 10 USDA crop report break of $.70 and beans $.50 and now hit a high for the week $.46 on corn and $1.00 higher on beans.
- Corn is about 50% planted.
- Beans are about 12% planted.
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Seasonal factors make this the perfect time to balance equities with commodities. READ HOW IN MAY'S SFO.