• HEADLINES: Soybeans recover and close firm on Friday: Chicago corn ends firm on strength in cash markets; Brazilian rainfall unlikely to be lasting: US wheat ends lower for third day; Russian/EU markets stable.

• Soybean futures were under follow-through technical pressure in early trade on Friday, but the early selling was countered by a larger than expected NOPA crush that supported higher prices. Soyoil paced Friday’s rally despite larger than expected NOPA stocks.

• The February crush reached a new record high of 6.42 million bu/day. US capacity has expanded, and the February data suggests that the US could theoretically crush nearly 2,500 million bu/year if needed. This total will dramatically expand by the end of 2025.

• May soybeans marked the third consecutive higher weekly close and finished just below the 50-day moving average. A close above $12.00 will likely trigger another round of fund buying, with the next targets near $12.80 and $13.00. Key support is offered at $11.70-11.80 May.

• Brazil’s market shed premium on Friday as rain blankets a majority of the safrinha Corn Belt Mar 23-28. Confidence is high with respect to this brief pattern change, but newly released long range guidance allows warmth/dryness to return in April. Brazilian crop risks stay elevated. We would also note Argentine fob basis rallied $0.08/bu overnight. US Gulf and Argentine origin are offered into the world market near parity for early spring. Chicago at $4.30-4.50 is not overvalued.

• Managed funds have pared their record net short position in the last three weeks. Funds’ short on Tuesday at 252,000 contracts remains historically large, and only stays in place amid normal Brazilian weather. Our best bet is that Brazilian production falls below 115 million mt, which leans bullish of corn until Midwest summer growing weather is known. Upside is pegged at $4.70-4.75. Spot EU corn settled at an equivalent above $5.00/bu for the first time since early February as feed markets seasonally bottom.

• May Chicago wheat ended slightly lower amid a lack of breaking news and as the US dollar index again bounces from key chart support. Importantly, Russia’s market is stable after rallying $5/mt on Thursday. The EU market ended slightly higher. Spot Chicago is fundamentally undervalued below $5.30, and downside risk between now and harvest is limited. The weather forecast is paramount from April 1 onwards. Regular April rainfall is needed across the US Plains, W Canada and across most of Ukraine and Russia.

• Managed funds on Tuesday were short a net 79,000 contracts of Chicago wheat vs. 66,000 the previous week. But it is the fund short of 36,000 contracts in KC that is in danger of being covered ahead of the US growing season. Plains crop ratings are improved year on year as of mid-March, but downgrades will be rapid if soil moisture loss is extended into April. This week’s Russian low in fob wheat could be important longer term.

To download our weekly update as a PDF file please click on the link below: