Written Commentary
CORN
Prices were $.01 – $.02 higher today registering the 4th consecutive higher close. Initial resistance for May-24 is the 50 day MA at $4.49 with next resistance at $4.63. Heavy rains this week across the southern Midwest and Delta region will likely delay early season corn plantings. Export inspections at 44 mil. bu. were in line with expectations. YTD inspections at 859 mil. are up 33% from YA, vs. the USDA forecast of up 26%. AgRural estimates Brazil’s 2nd corn crop is 93% planted. Stats Canada forecasts corn acres at 3.885 mil., slightly above expectations and YA, barley acres at 7.134 mil. just above expectations of 7 mil. while oat acres at 3.07 mil. were up 22% from YA, however slightly below expectations. Not much change from the CFTC this week as Money managers were net sellers of just over 1,500 contracts extending their short position to nearly 297k contracts. Friday’s USDA stocks/use figures among the world’s top 4 exporters is still expected to build to a 5 year high at just over 11%.
SOYBEANS
Prices are mixed with beans down $.02 – $.05 with bear spreading noted, meal was $3 – $4 lower, while oil was up 45 – 50. May-24 traded above Friday’s high however stopped short of resistance at $11.92 before drifting lower. Next resistance is at the 50 day MA, currently 12.07 ¾. Resistance for May-24 meal is at $350.70. The 50 day MA has capped rally efforts in May-24 oil the past 2 sessions. Spot board crush margins fell $.06 ½ today to $.75 ½ while oil PV gained nearly 1% to 40.9%. South American weather this week features heavy, potentially flooding rain in EC Argentina, Uruguay, and far southern Brazil. West central and interior southern areas of Brazil are expecting little if any rainfall over the next week to 10 days, helping accelerate soybean harvest while triggering crop stress for the 2nd corn crop. Relief from the dry spell is expected the last week to 10 days of March, however confidence that far out is not high. Export inspections at 26 mil. bu. were in line with expectations. YTD inspections at 1.286 bil are down 19% from YA, vs. the USDA forecast of down 14%. AgRural estimates Brazil’s soybean harvest has reached 55%, just ahead of the 53% pace from YA. Stats Canada forecasts canola acres at 21.4 mil. below YA and expectations of 22 mil. Soybean acres at 5.6 mil. were steady with YA. The CFTC showed MM’s were net sellers of just over 11k contracts of soybeans last week, extending their short position to a record large at 172k contracts. MM’s have been net sellers in soybeans for a record 16 consecutive weeks. MM’s were also net sellers of 10k oil and nearly 2k meal extending their combined short position in the soybean complex to 284k contracts, nearly the all-time record of 289k. Although the USDA stocks/use ratio among the world’s Top 4 exporters is expected to increase to a 5-year high, at 20.6% it’s still only slightly above the 19.2% low from 2 years ago.
WHEAT
Prices were higher across all 3 classes today with Chicago and KC up $.09 – $.13 while MGEX was $.07 higher. There is a key reversal May-24 Chicago with next resistance at last week’s high of $5.68. The rally KC May-24 stopped right at its 50 day MA resistance $6.03 ½. US temperatures across the nation’s midsection are expected to remain above normal thru midweek before slipping to more seasonal levels. Rain this week are expected to favor the southern Midwest and Delta region with very little offered for either the southern or northern plains resulting in deteriorating winter wheat conditions. Export inspections at 15 mil. bu. were in line with expectations. YTD inspections at 491 mil. are down 16% from YA, vs. the revised USDA forecast of down 6.5%. The Chinese cancellations have dropped outstanding SRW exports to the Asian country to 30 mil. bu. Stats Canada forecasts all wheat acres at 27.05 mil., slightly above YA vs. expectations for a slightly drop. MM’s last week were net sellers of just over 9k contracts of Chicago wheat, while being lite buyers in both MGEX and KC. Not much change from the USDA in the global S/D’s with stocks/use expected to hover near a 10 year low at 15%.
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