Written Commentary
MORNING AG OUTLOOK
SOYBEANS
A firm start for beans this morning as meal strength continues to be a significant supportive factor. Some might see the current rally in beans as illogical with Brazilian prices so much cheaper, however, the market continues to grind higher on historically strong crush rates and record meal demand, keeping the edge with the bulls. Weekly export sales this morning will be watched closely to gauge if demand is faltering at these higher prices.
CORN
Minor gains overnight in corn and May is again testing the upper breakout boundary of the recent range as March first notice day liquidation nears its end. Some friendly demand signals yesterday as ethanol production for last week hit a new daily production record high for that week of the year, ethanol stocks came in slightly lower than expected, Turkey purchased 350,000 tonnes of corn in an international tender (likely sourced from the Black Sea) and Ukraine export prices remain near a 5-month high. Weekly export sales this morning will be important to see whether last week’s price dip encouraged another round of strong US export demand.
WHEAT
Wheat continued the pullback yesterday and is starting steady this morning. Open interest dropped again yesterday and trading volume has been slipping lower this week on the pullback, which may be indication that the selling pressure from 1st notice day liquidation is ending. This week’s market pressure can be attributed to expensive US prices compared to other origins, which has sparked rumors of cheap Argentina or EU imports into the US, and a significant uptick in forecast precipitation for next week for the southern Plains, focused on eastern Kansas and Oklahoma, although the southwest Plains HRW crop regions may miss out. Above normal temperatures will remain in place for the next 2 weeks across all of the US. Weekly export sales this morning are expected in a range of 250,000 – 500,000 tonnes.
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