Morning Highlights


Highlights

  • USDA March S&D report is Thursday Mar 9 @ 11:00 a.m.CONAB will also have Brazil production estimates out on Thursday.
  • Mexico has suspended sugar export permits to the United States, as referenced by a Reuters news article yesterday. The exports were suspended due to reaching an allowed limit early, that ends March 31. Mexican officials partly blame an understaffed US Commerce Dept, because they claim there is no one there to negotiate with.
  • A complaint was filed with the US House and Senate against Carl Icahn accusing him of violating the Lobbying Disclosure Act. Icahn is a majority owner of CVR refineries, and has called for a change to the RFS.
  • Recent bird flu cases in the US have caused six countries to ban US poultry imports.
  • The US dollar index is -.040 @ 102.100, crude oil futures -1.12 @$49.15, DOW equity futures down 30 @ 20,838.Crude oil was down almost $3.00/barrel yesterday at one point.

Corn 

  • Weekly ethanol production last week came in at 1,022k barrels per day, down 12k from the previous week, but 4.5% better than last year at this time.Total corn used for ethanol is up 3.8% ahead of last year. Weekly ethanol stocks showed a drawdown of 235k barrels. Interesting to note; US cumulative gasoline use is down 8% compared with last year at this time.
  • USDA weekly export sales for corn total 741,000 tons with 93,000 new crop.  Milo sales were 110,000 tons.
  • This morning CONAB released their Brazilian corn production estimate. First crop production at 29.3 mil tons [+500k] and second crop –Safrinha at 59.7 mil tons [+1.1 mil] for a total of 89.0 mil tons.
  • Analysts’ average trade guess for Thursday’s corn carryout is 2.317 bil bu [last month USDA 2.320 bil]. Estimates for world corn carryout are 218.5 mil tons versus Feb USDA at 217.5 mil tons.

 Outlook: the lower trend prevailed again yesterday in corn futures. Expect mostly quiet trade positioning in front of the report numbers at 11:00 a.m. After 11:01 we’re still likely dealing with a US corn carryout of 25 mil bushel either side of 2.320 bil. Ethanol corn grind remains a positive support item, as ethanol production has held above 1,000k bpd for 4 months now.  Calls: quietly lower

Oilseeds

  • USDA weekly export sales for beans total 485,000 tons, soybean meal 302,000 tons, bean oil 8,400
  • Analysts’ average trade guess for Thursday’s bean carryout is 418 mil bu [last month USDA at 420 mil].Estimates for world bean carryout are at 81.52 mil tons versus Feb at 80.38 mil tons.
  • This morning CONAB increased their Brazilian bean crop estimate 2.1 mil tons to 107.6 mil tons.
  • Roasario Grain Exchange upped their Argentine bean crop estimate +1.5 mil tons to 56 mil tons citing better yields and improving weather.
  • The Brazilian REAL was trading weaker the past few days, down 1.6%.
  • Cash traders saying it’s tough to find a nearby CIF bean bid, but offers are plentiful.

Outlook: price weakness maintained control of the market yesterday, as SK17 almost reached the previous low from two weeks ago [10.17]. However, trade managed to claw back just above the 200 day moving average [10.20], so all is not lost. Given the report out this morning, there may be sell stops just under $10.15, so watch out. Even a surprise daily bean meal announced yesterday couldn’t help the bean complex. SX17 needs to keep its head above $10.08 – that’s the 20 week moving average –this week. Keep in mind, the Brazilian farmer may have something to say about this.  Calls: 5-6 cents lower

 Wheat

  • USDA weekly export sales for all wheat total 392,000 tons, with 40,000 new crop. By class: HRW 83k, SRW 47k, HRS 130k, SWW 105k, dur 24k.
  • The average trade estimate for today’s USDA S&D wheat carryout is 1.135 bil bu. USDA in Feb was 1.139 bil.Estimates for world wheat carryout are 248.62 mil tons versus Feb at 248.6 mil tons.
  • Midday forecasts yesterday brought increased chances for an upper level airflow pattern change, which some felt would bring better chances for rain systems to develop in the dryer parts of the US Southwest HRW areas. Wildfires were still burning in several areas yesterday.
  • Saudi Arabia issued a milling wheat tender for up to 720k tons for May-July shipment.Offers are due March 10th.

Outlook:  yesterday’s midday forecast came out looking for better chances of moisture  for the dry Southwest.  This kind of kicked the wheat market in the teeth. Calls: 1-2 cents lower to start