Morning Highlights


Highlights

  • US daylight savings time change is Sunday March 12th at 2:00 a.m.1 hour forward.
  • Weather forecasts are showing a steep drop in temperatures this weekend for most of the central and eastern US, with chances of snow on Saturday – heavier amounts in the east.
  • The next thing up for grain markets will be the March 31 quarterly stocks report and the first prospective spring planting intentions.
  • The sharp break in crude oil prices has caused the Russian Ruble to fall to 4 week lows. This could bring their competitive wheat price offers lower.
  • Another bird flu case in Tennessee was reported in Lincoln Co.
  • Officials estimate nearly 2 million acres have been burned from wildfires this week across TX, OK, KS, and Colo.
  • The US dollar index is -.150 @ 101.880, crude oil futures up .31 @ $49.60, DOW index futures up 65 @ 20,934.

Corn 

  • USDA left the US corn carryout projection unchanged at 2.320 bil bu.They did increase corn for ethanol use +50 mil to 5.400 bil, and lowered feed use -50 mil to 5.550 bil.
  • World corn ending stocks increased 3.0 mil tons to 220.68 mil.Brazil corn production increased from 86.5 mil to 91.50 mil tons.Argentine corn production up slightly to 37.5 mil tons.
  • The technical picture for corn was not pretty either, as CZ17 fell through its 50 day moving average [3.92] and its 100 day moving average [3.89]. CK17 also punched through its 100 day moving average [3.67], triggering sell stops.
  • Funds were estimated sellers of 14,000 contract Thursday.
  • There was talk in the international trade of Brazil corn trading into the east coast of Mexico for late March shipment.

 Outlook: there was nothing friendly in the report for corn bulls to feed on. The lower trade did some additional technical damage on the charts.  Will corn go for a clean sweep of 5 lower sessions this week? Or can someone resurrect the ethanol story or acres story to grab some footing? Calls: mixed to -1 cent

Oilseeds

  • Surprisingly, USDA increased US bean carryout from 420 mil bu in Feb to 435 mil bu for the March report. Bean exports were lowered 25 mil bu to 2.025 bil, while crush demand was increased 10 mil to 1.940 bil bu.
  • World soybean ending stocks increased from 80.38 to 82.82 mil tons.USDA put Brazil bean production at 108 mil tons, up from 104 mil.Argentine bean production was left at 55.5 mil tons.
  • SK17 traded down through its 200 day moving average [10.20] and then down through $10.15 which is the 50 week average on the weekly chart, and also a trend-line point for many.SX17 dropped below 10.07, its 100 day moving average, and traded down to a low of $9.98 ½ at one point.
  • Brazil weather should be mostly favorable into next week for bean harvest activity.

Outlook: with the looming larger Brazil bean crop, it’s likely that it will ‘need to find a home’ at some point. So USDA must have figured that a home would come at the expense of US exports! But for all the negative news, beans were only down a dime for May [$10.11] and about a nickel for Nov [$10.04 ½]. There’s likely still some longs baling out of positions overnight from a technical standpoint. Momentum won’t be in their favor. Calls: 4-5 cents lower

 Wheat

  • USDA lowered all wheat carryout 10 mil bu to 1.129 bil bu.They trimmed 10 mil off of imports, and made minor ‘by class’ adjustments to exports that washed out basically.
  • The wheat markets didn’t have any major changes in the USDA report, except for minor adjustments.Minneapolis futures were the only bright spot in trade yesterday, finishing in the green, but still closing under the 200 day moving average [5.41].
  • World wheat ending stocks were up slightly to 249.94 mil tons.Argentine wheat production up 1 mil tons to 16.0 mil.
  • Saudi Arabia issued a milling wheat tender for up to 720k tons for May-July shipment.Offers are due March 10th.US HRW could be a player in this tender, as it depends on quantity they take. Northern European wheat should be priced cheaper, but in limited amounts.
  • HRW areas still need some moisture, so the trade will watch forecasts next week.Spec funds are long KC and Minn, short Chicago.
  • French soft wheat ratings slipped 1 pt to 92% G/E according to farm office AgriMer.

Outlook:  it looks like Minneapolis wheat is bottoming out from its recent slide. The last two week’s price drop at least has some buyers pricing offers it appears.  KC and Chi futures may consolidate at current levels here at the end of the week. A little new export business would get a bid under the market.  Calls: steady/mixed