Written Commentary
MORNING OUTLOOK
Happy St. Patrick’s Day. Grains are higher. SK is up 4 cents and near 14.95. SMK is near 474.4. BOK is near 57.32. CK is up 5 cents and near 6.38. WK is up 5 cents and near 7.04. KWK is up 7 cents and near 8.27. MWK is up 6 cents and near 8.55. US stocks are mixed. US Dollar is lower. Crude is higher. Gold, silver, copper, coffee, cocoa and sugar are higher.
US domestic soybean basis is firm and crushers reach for soybean and farmers are not selling. Argentina lowered their soybean crop to 25 mmt vs USDA 33. They will need to import record 8 mmt with end stocks record low and near 5 mmt. Brazil soybean export basis continues to sink lower. It now works to import Brazil soybeans into US. World RSO and now sunoil prices continue to sink lower. BOA, Citi, JP Morgan and others made uninsured deposit of $30 billion to First Republic Bank. Bank failures could increase odds of US recession. China cut reserve requirement for most Banks by 25 basis points to boost their economy.
Corn futures are up and CK is now up 31 cents from recent low and testing 20 DMA. Lower Argentina crop, increase China buying US and good weekly export sales is offering support. Next key factor is USDA March acreage and stocks report which could find acres and stocks. As of March 7, Managed funds are long only 21,000 corn. Argentina lowered their corn crop to 36 mmt vs USDA 40. Still no Argentina harvest vs 18 pct normal. Both Argentina and Brazil are out of corn export market, China is buying Brazil new crop corn. Nearby Brazil corn is still 85 cents above US.
Wheat futures are higher. US north plains still wet and cold. US Midwest, south and SE are wet and cool. US south plains remains dry. As of March 7, Funds are short 100,000 Chicago wheat contracts. Egypt bought 120 mt Ukraine corn near $279 fob. Russia was $280 but Ukraine wheat comes with no wait or demurrage. Argentina season to date wheat exports are only 1.9 mmt vs 8.8 ly. Brazil who normally imports 6-8 mmt wheat have now exported 2.6. Wheat futures are oversold and could be undervalued. Lower Black Sea prices still offers unseasonable resistance.
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