- March soybeans turned down overnight after testing resistance at the 200-day moving average. Fund selling continued on through the day. The USDA made a rare soymeal export sales announcement of old/new crop meal sold to Ecuador. The business was seen as routine and had no impact on Monday’s trade. Funds were estimated sellers of 9,000 soybean contracts to start of the week. US soybean export inspections for last week were near unchanged from the previous week and totaled 39 million bu. There were 18 million bu loaded for China with more than half of it loaded out of the Gulf. Cumulative inspections, are slowly catching up to last year. However, the cumulative total of 831 million bu is still 37% or nearly 500 million bu behind last year. Next support for March soybeans is near $9.00, where both the 100-day moving average and a longer-term uptrend line cross. Major USDA reports have passed and the market remains focused on negotiations with China.
- March corn fell to strong chart-based support at $3.71 before recovering slightly into the close. Managed funds ahead of last Fridays’ report were estimated to be net long 75,000 contracts. Fund length peaked in mid-Dec and has since been pared down. The February WASDE lacked much insight into world grain price direction. Fob basis in Argentina has fallen $.20/bu this month as the harvest looms and production estimates are record large. Argentine corn exports won’t begin in bulk until June, but the market is positioning itself to boost its share of world trade, particularly relative to last year. The US’s stranglehold on corn exports will be loosened beyond spring. World barley prices are also a bit weaker. However, $3.70, spot, is expected to hold. Bitterly cold temperatures and tight/expensive hay supplies will sustain solid feed disappearance through the balance of winter. Much improved rain lies ahead in Central Brazil, but soil moisture is very short in Parana and Mato Grosso do Sul. A lasting period of normal rain is needed. Range bound corn trade continues.
- World wheat prices ended mixed in the first full session following the USDA’s Feb WASDE release. European futures closed lower amid lagging exports. Black Sea cash prices lost another $2/mt after hitting new multi-year highs in early February. The Russian market may have peaked, with seasonal trends neutral into spring. The Russian Government maintains an export forecast of 37 million mt, on par with USDA, and likely won’t move to control exports until at least March. US exporters sold wheat to Nigeria and Egypt. Russian and German fob offers are equivalent to $5.20-5.40, basis March KC. And May Chicago’s premium to March has fallen to just 2 cents. July Chicago premium to May is also just 2 cents. The Feb WASDE lacked the bullish spark needed to produce massive short covering, but it remains that US wheat is cheap at current prices. Downside risk in world cash values is limited amid ongoing strong domestic demand and record domestic wheat/ flour prices in Russia. Large US export sales are anticipated in coming weeks. Favourable N Hemisphere spring weather is still required to turn bearish beyond the current US market correction.