• The USDA March Crop Report is bearish grain and neutral to supportive to soybeans. The report reflected a diminished 2019 planting pace for soybeans, and a larger than expected seeding pace for corn. The US and world have an abundance of soybeans, it was the feedgrains where a bullish story was evolving. Today’s report changed that view. Key report details are as follows:

• The big surprise was US December-February corn use at just 1,205 million bu. This was the smallest second quarter corn feed use since the drought year of 2012/13 when cash corn prices were above $7.00/bu. Such a low quarterly feed use estimate is hard to understand amid the lower price of 2018/19 cash corn, near record numbers of livestock and the extremely cold winter weather. We can only speculate that the 2019 US corn crop was understated. But, NASS has had big unexplainable swings in US quarterly feed/residual totals in recent years and this looks to be another. US March corn stocks at 8,605 million bu are only down 287 million when the trade was looking for a decline of 600 million bu.

• The December-February soybean residual was 14 million bu vs. -55 million bu last year. US March 1 soybean stocks were up 607 million bu at a record high.

• The US 2019 all cropped acres were down 4.1 million from last year with farmers seeding 92.8 million acres of corn, 84.6 million acres of soybeans and 45.8 million acres of wheat. The US three primary cropped acres were down 2.6 million acres. Farmers opted to plant corn via the US/China trade war, and their concern that a deal with China will not be accomplished. They opted to seed corn as a result.

• NASS February wheat feed/residual use was -23 million bu, up 9 million bu from last year. US March 1 wheat stocks at 1,591 million bu were up 96 million from last year. We do not expect that WASDE will change their feed/residual forecast for wheat. US spring wheat seeding at 12.8 million acres was below trade expectations and US total 2019 wheat seedings are the lowest in 109 years at just under 46 million acres.

• The March WASDE report argues that a major weather problem or US/China trade deal is needed to improve the margin prospects for US farmers. The US March 1 corn stocks total was a big bearish surprise and WASDE will likely cut its feed/residual forecast by 125-175 million bu in April. US 2018/19 corn exports will also be trimmed leading to a more bearish old crop stocks outlook. The next level of support rests at $3.52 basis spot corn futures, the lows set back during the March futures contract expiration.

• Soybean futures will be supported by the seedings fall of 4.6 million acres and stability in the US soybean stocks outlook going forward. However, US soybean stocks are record large and the need for a US/China trade pact is growing. A decline in May soybean futures to $8.50/bu is expected.

• US wheat futures look to retest support at $4.30-4.40 support basis spot Chicago and then wait to gauge how the new crop world wheat growing season unfolds. We cannot overstate that without a US/China trade deal, the outlook for the US farmer and Chicago grain markets dimmed following today’s NASS report. The downside risk is not large from here, but a bullish catalyst is required to sustain anything more than a short covering bounce.

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Weekend summary 29 March 2019

• Soybeans held a narrow range and closed firm on Thursday. Oversold conditions ahead of USDA reports and reports that China had booked 2 million mt of US soybeans offered support through Thursday. Other market news was limited, and trade volume was light. Heading into the final weeks of the Argentine growing season, crop ratings remain strong. The Buenos Aires Grain Exchange reported that 51% of the crop was rated as good/excellent, versus just 2% a year ago. 39% of the crop was reported as mature versus the five-year average of 44%. Harvest progress was estimated at just 2% or 7% behind a year ago, with the exchange noting that cool weather was extending the growing season. The crop continues to add yield potential. Record large US soybean stocks are expected in Friday’s NASS report, so we expect that it will be the acreage figure that drives the initial price response. Spring weather will drive changes in acreage and the results of the China trade deal will determine the longer-term price direction.

• Chicago corn futures ended fractionally higher in weak volume. There simply isn’t much to do ahead of Stocks and Seedings data and high-level Government meetings between the US and China in Beijing. US/China progress continues, although additional corn demand cannot be confirmed. Funds were net buyers of 1,000 contracts. US weekly export sales totaled 36 million bu, up 2 million on the previous week and some 6 million above the pace needed to hit the USDA’s target. This included China’s recent purchase of 300,000 mt. We do mention that Argentine corn is offered cheaply for early/mid-summer arrival. Basis there for July delivery has fallen to $0.16 over Chicago futures as harvest surpasses 10% complete. An early low in Argentine basis levels could form amid reduced Brazilian corn production. We doubt NASS data on Friday will be overly exciting. More important is US/Chinese trade policy and whether active precipitation continues across the Central US beyond the first half of April. It is noteworthy that spot corn has held $3.70 despite a record fund short position. A fundamental spark is needed to move funds.

• Fund selling in Chicago wheat returned ahead of Friday’s USDA data. There is again little new wheat-specific news available. Funds sold 3,5000 contracts. Needed rains will fall across the driest areas of Eastern Australia over the next 48 hours. This is rather timely as planting begins in April. However, dryness returns and will be present throughout the 3-15 day period. The Aussie trade is well aware of El Niño’s correlation with heat/dryness there during the growing season. And the EU/Black Sea forecast is drier than previous runs across E Europe and the entirety of Ukraine. Cumulative rainfall in E Europe/Ukraine into April 11 is pegged at 45-60% of normal. Grain basis in Ukraine has been firm amid less than desirable spring rains. Interior US HRW basis is firm and has rallied in the last week. The cash market is not reflecting an oversupply of high protein wheat. May CME’s 20-day moving average sits at $4.57, and we maintain that a range of $4.50-4.95 into spring. A US/China trade deal would open the market to a larger rally effort.

• Chicago markets are lower at midday amid macro concern and an ongoing lack of fresh news surrounding US-Chinese trade negotiations. The next meeting between the two takes place later this week in Beijing, but in the last week the lack of news has emboldened world grain bears. Interest rate yield curve inversion has been a major talking point this week, with the bond market seemingly pricing in a rate cut by year-end. Debate is ongoing whether Fed interest rates will be unchanged or lower over the next nine months, but the concern over a continued slowdown in US/world economic growth is present. The US$ is up slightly this morning, having found support at February’s low but work maintains that the US$ Index reached a lasting peak at 98 points.

• The US Census department continues to catch on official US trade, with January data released this morning. The US’s trade deficit with all countries fell to $51 billion, vs. expectations of $57 billion. The US’s deficit with China fell to $33.2 billion. Reduced total imports are cited. This is viewed as mixed, but a modest boost in net trade expected in the first quarter will keep US GDP growth at least stable in the near term. The value of US ag exports in Jan totalled $11.4 billion, unchanged on the year. The value of ag exports to China totaled $791 million, down $1.1 billion from the previous year. US exporters are finding other markets. This week’s EIA report is viewed as slightly bearish corn/ethanol but the data is being driven heavily by US weather. Ethanol production through the week ending last Friday totaled a meager 287 million gallons, down 8 million on last week and down 19 million from the same week in 2018. Recall a sixth of all US ethanol production capacity has been shuttered due to flooding. Ethanol stocks were unchanged and record large at 1,026 million gallons. Crude stocks last week were up 2.8 million barrels. A draw in stocks was expected. Spot WTI at midday is down $0.50/barrel.

• The midday GFS weather forecast is drier across the Southern third of Brazil, which accounts for 35-38% of safrinha corn area. A stagnant pattern lies ahead, with normal/above normal rain offered to Mato Grosso and Goias while little no rain is forecast elsewhere. Rain will be needed in S Brazil by mid-April. The US forecast is generally unchanged, if a bit drier in Plains and wetter in the Midwest late next week and beyond. The EU and GFS models overnight trended wetter, and so it remains that lasting (and needed) dryness is unlikely into the first week of April. Widespread rainfall worth 0.50-1.50″ impacts the heart of the Corn Belt on the weekend. A second and more widespread event works across the Plains next Thurs-Sat. Scattered showers are probable across the N Plains and Midwest in the 11-15-day period. Temperatures will be variable, with abnormally cold readings due this weekend.

• The lack of trade news and elevated farmer selling has weighed on row crop markets. We do expect S America’s corn crop to be absorbed quickly by record consumption. A lasting bearish trend is unlikely amid funds’ sizeable short positions and less than ideal weather persists in the US and Europe.

• Following a weaker start to the morning, soybean futures traded under pressure through the day to end 5-6 cents lower on Tuesday. Funds were estimated sellers of 4,500 soybean, 3,500 soymeal, and 3,000 soyoil contracts Overnight, China suspended canola imports from a Canadian company, the second such suspension this month, citing phytosanitary concerns. The news sent canola futures $5-6 lower, and put nearby May back near contract lows. History shows that canola futures were pulled lower through last summer’s trade war, but did not fall to the extent that US soybeans did. At the peak, nearby canola traded at as much as an $80/mt premium in late June. That spread has steadily narrowed in recent months as soybeans have trended higher and canola lower, and the spread this week has narrowed to just a $6.45/mt canola premium.  Chicago soy markets continue to wait on China news, as well as the end of week USDA reports. Funds remain heavily short; we look for slower trade into Friday.

• Chicago corn futures ended slightly lower amid a lack of fresh news on US-Chinese trade policy, as the near-term forecasts includes some measure of warmth in early April. We mention that corn seeding across the Delta/Southeast is largely on schedule. Forecasts next week will gather much more attention as operational models begin to show conditions on and just after April 15. Climate scientists are looking for an overall wet spring. Funds in Chicago sold an estimated 10,500 contracts. US ethanol economics continue to improve. Gasoline futures hit new seasonal highs, with spot RBOB this evening settling at $1.96/Gal. RBOB’s premium to ethanol sits at a lofty $.55/gal. DDG prices in IL continue to firm, while values elsewhere have found support in recent weeks. We calculate actual cash ethanol production margins in the W Midwest at $.20/gal over variable costs and just $.02/gal below all costs. Production will recover once weather improves. Friday’s acreage data will provide a starting point for new crop balance sheets. But we remain concerned about ongoing wet US weather and depleted soil moisture in key areas of Eastern Europe and Ukraine.

• US and European wheat futures ended mostly lower, though spot Chicago found support via Egypt’s purchase of 120,000 mt of US SRW for almost nearby delivery. Egyptian demand will be waning as their domestic harvest approaches, but we do mention Ethiopia is seeking a sizable 1 million tons for old crop delivery, which will trigger a scramble to source supply on behalf of world exporters. There is little other fresh news available. Long term climate guidance is trending warmer/drier in Europe and the Black Sea region. Negative soil moisture anomalies are already present across key areas of E Europe as well as much of Ukraine. New crop Black Sea offers have rallied $5/mt in recent weeks to $200. Work maintains that confirmation of above trend yield is needed to pull down new crop offers moving forward. Such confirmation won’t be available until late May/early June. Otherwise, wheat follows corn into the release of NASS stocks and seedings data.

• Chicago futures are firmer at midday. Early weakness in corn/wheat was short lived with soy futures holding generally in the green. The volume of trade is modest with traders lacking directional market conviction heading into Friday’s NASS Stocks/Seeding Report. The market has a firm feel to it, but May corn would have to close above its 50-day moving average at $3.80 to spark any bullish enthusiasm. The positioning of the market is set up to be bullish with funds holding a record corn short, but a bullish chart and fundamental spark is needed to ignite covering.

• Chicago brokers estimate that funds have bought 1,900 contracts of corn, 1,500 contracts of soybeans and 1,200 contracts of wheat.

• US weekly export inspections for the week ending March 21 were; 39.2 million bu of corn, 31.5 million bu of soybeans, and 12.5 million bu of US wheat. For their respective crop years to date, the US has shipped out 1,118 million bu of corn (up 208 million or 23%), 1,049 million bu of soybeans (down 455 million or 30%), and wheat exports of 674 million bu (down 42 million or 6%).

• Traders have asked if Friday’s Mueller Report exonerating US President Trump will make him more-or-less willing to do a trade deal with China. Washington DC sources doubt that it will not have any impact. Most argue that President Trump will need trade related accomplishments heading into the 2020 election to boost the US/world economy. The US and China have a vested interest in a bilateral trade deal. The question that exporters are pondering is whether China will secure additional US soybeans, corn or pork ahead of any late week “trade update”. We hear on the topic of trade that negotiators are trying to find a way for both sides to lower or end tariffs. One way that China can push to lower tariffs is showing they will keep their pledges by making large ag purchases to lower the US trade deficit.

• Cash soymeal basis levels keep rising amid slowing crush rates and the difficulties in moving cash soy/grain in the Missouri Valley. The strength of cash meal will underpin the soybean market in the next 30-45 days.

• The midday GFS weather forecast offers no real change from the overnight run. Cool/unsettled weather will persist with late week snows of 2-8” slated to drop across NE and South Dakota. Showers will impact the remainder of the Midwest every 3-4 days with temperatures being extremely variable but averaging out to be slightly below normal. The combination of melting snow and new rounds of heavy rain will worsen the flooding across the Missouri Valley and Delta into April10.

• The midday S American GFS weather forecast shows no change with dry weather for the southern two thirds of Brazil and all of Argentina over the next two weeks. The dryness raises yield risks for Brazilian winter corn with pollination to take place in 2-4 weeks.

• Positioning appears to be the key with May corn is sitting right on the 50-day moving average at $3.80 while soybeans/wheat rise on limited producer selling and rising cash soymeal basis. A US/China trade deal remains a “big deal” for US ag prices while Brazilian weather must be watched for lasting dryness.

• Strong grains and weak soybeans are the Chicago trends at midday. May corn has run up against the 50-day moving average at $3.8025 which is where temporary selling pressure has emerged this morning heading into March option expiration. A close above $3.805 May corn would start to chase the funds out of their net short positions with the next resistance zone being $3.8325, the 100-day moving average. Wheat appears to be following corn amid the hope that it is next on China’s shopping list. Weak soybeans are due to active cash selling in Brazil late yesterday as farmers fret that the US/China could be nearing a deal. S American farmers have enjoyed the US/China skirmish to date, but they well understand that a deal would end that windfall. Chicago appears to be wanting to buy grain/sell soy to encourage Midwest farmers to seed corn.

• Traders estimate that funds have bought 2,100 contracts of wheat and 4,100 contracts of corn while selling 4,200 contracts of soybeans. In soy products, funds have sold 3,600 contracts of soyoil while buying flat in soymeal. USDA announced the sale of 300,000 mt of US corn to China. This was the first sizeable sale of US corn to China in years. There have been smaller US corn sales that have had to be GMO approved by the China Government. Today’s purchase seems to confirm that US non-tariff barriers related to US GMO corn strains have been removed. We hear that the sale is for LH April and early May, a nearby position, which is an old crop surprise. China is still asking/working additional US corn. No commercial comment is available any new tonnages. It appears that China is willing to secure US corn as US Trade negotiators head for Beijing this weekend. China wants to be seen as keeping its pledges/promises on US ag purchases to be a trusted partner. The hope is to prod the Trump Administration to consider lifting US tariffs. We do NOT see the Chinese purchase of 300,000 mt as being a one-off event with exporters suggesting China is asking for offers of US ethanol/DDGs.

• Energy futures are sharply lower which has spurred selling across the commodity complex. The selling appears to be related to the weakness in the US stock market and a general wave of profit taking into the weekend. The fear of global economic weakness ebbs and flows, but dreadful data from Europe’s manufacturing sector was the catalyst for today’s macro break.

• US President Trump indicated on Fox News this morning that the US would likely complete a favourable trade deal with China. No time-frame was announced, but the point was that the President continued to be upbeat on negotiations.

• The midday GFS weather forecast offers no real major change over the next week. Cool and unsettled weather will produce showers and storms on the weekend with the best coverage occurring early next week across the OH Valley with totals ranging from 0.25-1.00″. A few sunny/cool days follow late next week before a new potent storm system produces another round of heavy rain across the Midwest. This system was weaker in the overnight forecast. The combination of melting snow and new rounds of heavy rain will worsen the flooding across the Missouri Valley and Delta into April.

• China is widely expected to secure additional quantities of US corn, ethanol and DDGs in coming business days. Corn has the bull story on China buying/Midwest flooding. Soybeans are down on active Brazilian cash selling due to the falling value of the Brazilian Real and worry that the US/China are nearing a deal.

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Weekend summary 22 March 2019

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Fund positions disaggregated data

• Soybeans were mostly higher through the day on Thursday and 4-5 cents higher at the close. Rumours continued that Chinese buyers are preparing for large US Ag purchases in anticipation that tariff’s on US commodities will be removed in the near future. Corn gained on concerns for Midwest and Delta flooding, and soybeans kept pace on fund short covering. The weekly Export Sales report did not offer much inspiration, with a routine weekly sales total. However, the pace of export commitments is slowly falling in line with the USDA’s annual export forecast. Cumulative exports are down 30% from a year ago, but outstanding sales are record large at 13 million mt. A steady weekly export rate is needed to reach the USDA’s annual forecast. Funds are heavily short Chicago soybeans, with major moving averages just above the market. A steady/higher close on Friday will have soybeans higher for the week, with major USDA reports out next Friday.

• May corn rallied 5 cents, breaking through its 20-day moving average for the first time since late February. There are rumours of Chinese demand, and while still little is known about US-China trade details, our contacts do suggest a host of new buying/pricing occurred Thursday evening. And the trade is fully aware of how the hog market has changed in recent weeks. US corn export sales through the week ending March 14 totalled 34 million bu, more than double the prior week. Only 30 million per week is needed to meet the USDA’s 2,375 million bu forecast. This is an obtainable pace despite S America’s looming crop. Recall global corn consumption in 2018/19 is by far record large. The US weather forecast shows little change in the near and long term. Widespread heavy rain and cool-ish temperatures return in late March/early April. NOAA’s spring forecast is wetter than normal in all areas, but particularly wet across the Southeast and Western Plains. We reiterate that managed funds are short an estimated 225,000 contracts ahead of a growing season and as US-China tension begins to thaw.

• US wheat futures ended steady to higher amid noticeable strength in corn and as seasonal trends in world markets turn a bit more supportive. Weekly US export sales were a disappointing 11 million bu, but again HRW sales were decent 5 million bu. Recall HRW sales need to average only 1.5 million bu per week to meet the USDA’s target. Rumours of Chinese interest in US corn follows a surge in hog values, and so funds are beginning to pay more attention to potential ramifications of China buying massive tonnages of US ag products. Wheat will be included, but we hear of nothing concrete with respect to China even pricing wheat. Western Europe will stay dry for another 10 days before a potentially wetter pattern emerges. Normal/above normal rain is needed in W Europe, N Africa and E Europe in April and beyond. Our bet is that wheat has scored its seasonal bottom ahead of the growing season, in which trend Black Sea/EU yields are needed to build exporter stocks.

• Mixed/low volume has been the Chicago price action with few traders wanting to take on more risk amid uncertain US/China trade. Summer row crops are weaker amid large S American supplies and their discount in world fob markets to US values. The discount of Argentine fob corn and Brazilian fob soybeans to Gulf values is capping Chicago rallies. As stated, the volume of trade is miserable, and the activity of funds has been able to push values around rather easily. Funds continue to pile into a larger net short position as they protect their gains heading into the close of the month and quarter. We look for a mixed to lower close with poor US export sales expected on Thursday.

• Traders estimate that funds have sold 1,600 contracts of wheat, 3,700 contracts of corn, and 2,600 contracts of soybeans. In products, funds have sold 2,200 contracts of soymeal while being flat in soyoil.

• Last May and June, Chicago did not react to threats of US tariffs on China until they were documented and applied. Then, Chicago prices fell precipitously as the impact of tariffs were documented. The learning point is that the markets do not feel comfortable forecasting (adding discount/premium in price) until a political event can be widely known or assured. The same phenomena will occur with the coming final US/China trade negotiations, Chicago will rally or fall sharply when an announcement of a signing or a breakdown in the talks. A US/China trade deal is a binary event. Our hope in a deal is tied to US President Trump needing a ”trade victory” before the US 2020 election and USTR turn to focus on the EU and Japan trade.

• June hogs have rallied to new highs this morning as the market continues to hear rumours of new Chinese need/demand for US and world pork. Chinese importers appear to be securing US pork in anticipating of tariff reductions. Tariff reductions on either the US or Chinese side are likely a sticking point in negotiations with the Trump Administration showing that after the agreement of USMCAs, steel/aluminum tariffs linger months after. China wants to be sure that if it has a trade deal with the US, that tariffs on Chinese goods end. As the old saying goes, tariffs are easy to apply but difficult to take down. USMCA approval remains on hold on the broken promises on US steel/aluminum tariffs.

• The weekly US ethanol grind was 295 million bu of corn vs 295.5 million in the week prior, but below 306 million bu last year. US ethanol stocks grew to 1.026 billion gallons, up 3% on last year and up 29 million gallons from last year.

• The midday GFS weather forecast is slightly drier in the next seven days with weekend rains being trimmed to 0.1-.6″ with the next system not expected until the last half of next week with totals then of 0.5-2.00″. The snowmelt (to come) is estimated to hold 4-10.00” of water and the flooding over the next two weeks will worsen. The key for spring planting will be weather over the first three weeks of April and whether warm/dry weather can evolve or more of the same cold/wet stuff delays corn seeding.

• Pres Trump has said that the US will not end its tariffs on China unless they comply with the proposed agreement. This is the reason why China is pushing back and delaying the deal. We guess that one way for China to comply is to secure a massive amount of US goods at the start of the agreement. Trump said that a US/China deal is coming around nicely. The politics of US/China frustrates traders.

• A low volume/mixed Chicago trading session is underway with selling noted in corn/soybeans as futures pushed below Monday’s low. Wheat futures have held more stable. Chicago values are struggling for direction amid limited news on US/China trade negotiation progress and large S American supplies. Chicago volume is curtailed by the binary aspect of a US/China trade deal. An announcement of a deal will cause a sharp Chicago rally on Chinese demand, while delays or no deal would be bearish. Last June, the market did not react until the US tariff announcement and the same will occur in a trade deal or no deal. Forecasting politics is difficult. Yet, there has been enough progress in negotiations and both the US and China political leadership need to move beyond the 9-month trade spat. The question is when. Research doubts that corn, soybeans or wheat can sustain a break with funds so heavily short.

• Traders estimate that funds have sold 2,900 contracts of wheat, 4,700 contracts of corn, and 3,100 contracts of soybeans. In products, funds have sold 3,100 contracts of soyoil and 1,500 contracts of soymeal.

• Plains and W Midwest farmers continue to be vocal that the autumn of 2018 was one that they would like to forget amid the abundance of rain and length of the harvest. Seed corn company test plot and producer harvest data offers a significant drag in US corn and soybean yields due to the wet adverse weather. However, since NASS harvests their objective test plots in September/early October for the October Crop report, did they catch this yield degradation. That is the big question that farmers and traders are pondering heading into next week’s March Stocks report. If NASS overstated US corn and soybean yields, it should be uncovered in coming quarterly stocks estimates. A bullish surprise could loom in the US corn stocks data on March 29.

• The WSJ is reporting that 9 million people and countless thousands of livestock are being adversely impacted by severe flooding. NE Governor Peter Ricketts is calling the flooding; “The worst that the state has ever endured”. Standing water is everywhere and as temperatures warm, the snowmelt is expected to worsen. The forecast offers mostly dry weather for the next 7-9 days, but it is going to be important that near to above normal rains do not return in early April or severe spring planting delays will be endured. The flooding comes at a bad time for cows calving and for dairy operations struggling with low milk prices and poor margins. Soy crush plants are struggling amid the flooding.

• A seasonal/slightly wetter weather profile is offered for the Midwest/Plains for the next 8-9 days. The GFS forecast has added light showers on the weekend and early next week. Amounts will be generally less than 0.5″ with coverage no better than 45% of the Central US. Temperatures will be seasonal with highs ranging from the mid 40′s to the mid 60′s. No bitter cold is foreseen which will start to warm soil temperatures. A new potent storm system will form in the SW US mid next week which will pull eastward through the Plains/Midwest from March 20 into April 2. This system looks to lay down 0.5-2.50” of rain and introduce new flooding woes. El Niño is rapidly building in the equatorial Pacific which looks to keep the Central us wet into May.

• A US/China trade pact is a binary event in being either very bullish (if it occurs) or very bearish (if it does not). Funds are adding to a HUGE net Chicago short. If a China trade deal occurs there will be upside fireworks in US ag markets. US President Trump will be holding a press conference this afternoon with Brazilian President Balsonaro. We expect reporters to ask about a US/China deal progress. We continue to believe that this is no place to turn bearish on Chicago.

• Commodity markets always react more to US/China trade news than other financial markets due to leverage that is needed to control a futures position. A China media source wrote on Saturday that a US/China trade summit between US President Trump and Chinese President Xi would not happen until June. It could not be corroborated with any other news sources and based on a 2.5% rally in China’s stock market index overnight, we are dubious to its correctness. Yet, some in the US commodities industry are running with the story and it is causing pressure in Chicago. Our confidence in a China sponsored June signing date between Trump/Xi is low. US/China negotiations are occurring at high governmental level and last week both USTR Ambassador Lighthizer and US President Trump stated that a US/China deal could be announced in weeks. We see no corrections from the US side on their comments of reaching success in “weeks” and we suspect that if negotiations are not completed in quick order, the US could again raise tariffs on Chinese goods. We doubt that the US/China negotiations will drag on for months. No one in DC seems to know where the US/China June signing date has come from.

• Traders estimate that funds have sold 2,200 contracts of wheat, 3,600 contracts of corn, and 2,900 contracts of soybeans. In products, funds have sold 1,100 contracts of soymeal and 900 contracts of soyoil. Volume has been extremely slow in the morning Chicago decline with their being no directional passion. US export inspections for the week ending March 14 were; 31.3 million bu of corn, 30.9 million bu of soybeans, and 13.0 million bu of US wheat. For their respective crop years to date, the US has shipped out 1,078 million bu of corn (up 221 million or 26%), 1,017 million bu of soybeans (down 461 million or 31%), and 660.5 million bu of wheat (down 6% or 43 million).

• Ukraine has exported most of their 8 million mt of milling wheat that was a soft allocation by the Government last autumn. And Ukraine has exported 5 million mt of feed wheat, with there being no passion to export the remaining 3 million amid high fob prices relative to corn. Also, Russian wheat export estimates for March are declining to 1.8 million mt with sales going forward to be sharply restricted by strong interior prices and a lack of supply in the east. We doubt that Russia will export 37 million mt and see the total being between 34-35 million mt.

• A dry/mild weather profile is offered for the Midwest/Plains for the next 8-9 days. Cool temperatures will give way to warming later this week which will accelerate the snowmelt across the north and add to tributary flooding through the West Central US. Several weak systems will produce rain through the Plains/Delta with the north largely dry/mild. A new potent storm system is forming in the SW US next Wednesday (March 27) which looks to pull eastward in the last half of next week. This system is farther north in the GFS weather solution, farther south in the EU model. A wet Central US weather flow returns late March to exacerbate flooding woes.

•  The market’s confidence in a US/China trade deal was diminished on the weekend with a China media report saying that a signing summit could be delayed to June. That report cannot be confirmed with either US or Chinese sources. Our confidence in its correctness is therefore low. Funds are sitting on a record corn short with key NASS reports just 9 trading days away. Central US weather looks to be turning cool/wet in late March and early April. This is no place to be making new sales in the grains.