Written Commentary
CORN
Prices were $.04-$.06 ½ lower today as speculative traders continue to pare back their long position in corn ahead Monday’s USDA data and the end of Q1. Early strength was not able to hold as spreads also weakened. Futures fell to fresh 3 week lows driven by expectation for increased US corn acres and improved crop prospects in Brazil. US farmers are expected to plant 94.3 mil. acres of corn this spring, up nearly 4 mil. from YA. Mch. 1st stocks are expected to come in about 200 mil. below YA and 8.15 bil. bu. Ethanol production slumped to an 8 week low at 1,053 tbd, or 310 mil. gallons, down from 325 mil. the previous week however steady with YA. There was 105.5 mil. bu. used in the production process, or 15.1 mil. bu. per day, still above the 14.84 needed to reach the USDA forecast of 5.50 bil. bu. In the MY to date there has been 3.081 bil. bu. used, or 15.25 mbd, an annualized pace of 5.565 bil. Despite the lower production ethanol stocks jumped to 27.4 mil. barrels, also above expectations. Implied gasoline usage fell 2% to 8.643 tbd and was down 1% YOY. Tomorrow’s export sales are expected to range from 25-55 mil. bu.
SOYBEANS
Prices were mixed across the complex in choppy 2 sided trade. Beans were within $.01 of unchanged, meal was down $1.50 while oil was up 35 points. Bean spreads weakened while products were little changed. May-25 beans continue to consolidate around $10. Fresh 3 week low for May-25 meal with next support at its contract low of $290.80. For now May-25 oil rejected trade above $.43 lb. Spot board crush margins tacked on another $.01 to $1.14 per bu. with bean oil PV settling above 42% for the first time in 4 weeks. SA weather is mostly favorable with cooler, wetter outlook for Argentina, beneficial for late developing crops however will slow harvest activities. US soybean acres are expected to slip roughly .3 mil. to 83.8 mil. Mch. 1st stocks are expected at nearly 1.90 bil. which would be up 50 mil. from YA. The USTR is hosting a 2nd day of hearings in order to allow additional respondents to voice their objections (a few support the plan) to the Trump Administrations proposal to impose hefty fees on Chinese owned vessels that dock at US ports. Export sales tomorrow are expected to range from 10-20 mil. bu. for soybeans, 150-300k tons of meal and 5-20k tons of oil.
WHEAT
Prices were $.03-$.09 lower today also in choppy 2 sided trade. CGO futures were the downside leader. Spot May-25 futures for all 3 classes have traded to fresh 2-3 week lows. Better prospects for rains in Black Sea winter wheat areas would provide short term relief however not all models are consistent in rainfall totals and coverage. Rains this week in the US are expected to be heaviest across the Gulf coast and Delta region stretching north thru the central Midwest and ECB. Shower activity will be more scattered in the WCB and even lighter in the southern and northern plains. Wheat acres are expected to expand about 700k with the gains coming from the winter crop. Both spring wheat and durum acres likely to be little changed from YA. Wheat inventories as of Mch. 1st are expected to be 125 mil. above YA at 1.215 bil. Egypt’s PM today estimated their countries strategic wheat reserves are enough to cover 4 months of needs. Russian Govt. officials today state that several conditions need to be implemented before the Black Sea ceasefire can be activated. One of their top priorities is for their state run bank to reconnect with the international payment system SWIFT. Export sales tomorrow are expected to range from 5-20 mil. bu.
Charts provided by QST.
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