Written Commentary
CORN
Inside trade for corn today with prices steady to $.03 higher. Spreads were mixed however Mch/May did reach a new low at $.15 ¼ as long speculative positions either roll or liquidate ahead of FND next week. Next major upside resistance for spot Mch-25 rests between $5.08-$5.10. Much of Argentina will be dry and very hot over the next week, particularly across the northern growing areas where crop stress will once again be on the rise. Rain is expected across the southern growing areas this weekend before gradually shifting north late next week. The International Grains Council lowered their global production forecast 3 mmt to 1.216 bil. tons, still above the Feb-25 USDA forecast of 1.212 bil. tons. Ethanol production rebounded to 1,084 tbd, or 319 mil. gallons, up from 318 mil. the previous week and steady with YA. LW’s production was above expectations. There was 109 mil. bu. used in the production process, or 15.5 mil. bu. per day, above the 14.86 needed to reach the USDA forecast of 5.50 bil. bu. In the MY to date there has been 2.558 bil. bu. used, or 15.3 mbd, an annualized pace of 5.591 bil. Ethanol stocks jumped to 26.2 mil. barrels, above expectations and YA at 25.5 mb. Implied gasoline usage fell 4% LW to 8.239 mil. barrels per day, however was still up .5% over YA. The BAGE reports Argentine corn ratings improved 3% LW to 19% G/E. Export sales tomorrow are expected to range from 35-70 mil. bu.
SOYBEANS
Prices were higher across the complex today as soybeans and bean oil closed near session highs. Beans were up $.10-$.15, meal was $1-$2 better while bean oil was up nearly a full $.01 per lb. Spreads were weaker across the complex in the spot contracts however firmed up in the back months. It was an inside day for soybeans with technical support for the Mch-25 contracts where the 50 and 100 day MA’s converge just above $10.20. Inside trade for the products as well. Mch-25 meal is stuck between $290-$300 mt while oil confined to $.46-$.48 lb. Late yesterday Pres. Trump suggested a new trade deal with China could happen and would eliminate a potential trade war between the world’s 2 largest economies. He went on to say that if a deal were struck, it would be because of his strong relationship with Chinese Pres. Xi. No indication when such a deal could come to fruition, nor when the 2 leaders will even speak, however with fresh news limited it’s as good a reason as any for the higher trade. The US Climate Prediction Center described the current La Nina conditions as weak and expected to be short lived. They went on to state there is a 60% probability La Nina conditions will last thru April and a 65% chance it will transition to neutral between March and May. The IGC lowered their global soybean production forecast 2 mmt to 418 mmt, due to lower production in Argentina and Paraguay. This compares to the Feb-25 USDA forecast of 421 mmt. The BAGE reports Argentine soybean ratings improved 2% LW to 17% G/E. Export sales tomorrow are expected to range from 4-20 mil. bu. for soybeans, 200-550k tons of meal and (5)-15k tons of bean oil. Bean oil sales have come to a screeching halt as prices have recovered to a premium over Malaysian palm oil after trading at a record discount in Dec/Jan.
WHEAT
Prices lower across all 3 classes today, unable to hold early strength. Chicago and KC were the downside leaders of $.05-$.07 while MGEX was down $.01. Spot MGEX futures have gained nearly $.20 bu. on CGO this week as widespread drought lingers across the northern plains just ahead of the Spring plantings. This week’s updated drought monitor show durum acres in drought were down 2% to 61%, vs. only 5% YA. Spring wheat acres held at 40% vs. only 22% YA, while WW acres in drought fell 3% to only 20%, vs. 12% YA. The IGC raised their global wheat production forecast 1 mmt to 797 mmt, largely due to higher production in Kazakhstan. This compares to the Feb-25 USDA forecast of 794 mmt. Japan’s Ag. Ministry bought just over 96k mt of Aussie, US and Canadian wheat in a routine tender. A Taiwan flour mill bought bought 102.5 mt of US milling wheat for April/May shipment. Export sales tomorrow are expected to range from 12-22 mil. bu.
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