• HEADLINES: US March soybean/corn stocks bullish; Seedings as expected; Old crop to gain on new crop.

• The March 1 Stocks and Seeding Intentions Report was bullish for old crop corn, soybeans, and wheat. However, 2023 Seeding Intentions of US corn, soybeans and spring wheat came in close to expectations. Bull (old/new) spreads are expected to gain while the push will be on to own old crop soy/ corn is on as supplies decline into late summer. The US corn export program will be expanding due to recent Chinese demand while US soy crushers will be seeking cash soybeans to maximise profits on rising renewable diesel demand (soyoil) and soymeal export sales (sharp fall in Argentine soy crop).  It is now up to Mother Nature to determine if NASS corn/soy/spring wheat will be seeded.

• We calculate second quarter corn feed/residual use at 1,501 million bu, down 37 million from last year. WASDE is forecasting that US 2022/23 corn feed residual to be down 8% or 443 million bu from last year. Yet, the Q2 US corn feeding rate was down just 2%. WASDE needs to adjust their feed/residual use upwards by 100-150 million bu. The US is feeding more corn than forecast.

• US March 1 soybean stocks at 1,685 million bu are down 247 million bu from last year. The stocks were 70 million bu below trade estimates with the Q2 residual use calculated at -26 million bu. The residual argues that the 2022 US soybean crop was overstated. It will take the June report to corroborate, but the loss of 60-70 million bu of supply is bullish with old crop US soybean end stocks at just 210 million bu. WASDE will raise their residual use of 2022/23 soybeans to take old crop stocks even lower.

• US March 1 wheat end stocks were 946 million bu, down 83 million from last year which argues for a larger feeding rate. Although US wheat export data is near a 40 year low through mid-March, the wheat stocks total is supportive to price and argues that new crop weather for the W and N Plains will be important.

March 1 US Stocks (million bu)

2021        2022        2023

Corn            7,696        7,758        7,401

Soybeans         1,562        1,932        1,685

Wheat            1,311        1,029        946

• US 2023 total crop intentions were forecast at 318.1 million acres, up 6 million acres from last year, the largest seeding since 2019. North Dakota corn seeding was up 27% at 3.75 million acres. Illinois and Iowa corn seedings were up 200,000 acres each or 2%. The US corn seeding gains came from a host of Midwest States. 1 million from trade forecasts. This is the largest US corn seeding since 2021 at 93.3 million acres. The seedings will produce harvested acres of around 84 million acres.

• US soybean seedings were estimated at 87.5 million acres, the same as last year and the February Outlook Meeting forecast. US soybean seedings have held just above 87.0 million acres for the past 3 years.

• Total 2023 US wheat seeding rose to 49.9 million acres, up 4.2 million acres. US winter wheat seedings were up 13% at 37.5 million acres, up 2.5 million acres with another sizeable gain noted in durum seedings which was up 9% at 1.78 million acres. US other spring wheat seedings were down 2% from last year at 10.6 million acres. The total expansion of US all wheat acres was larger than expected.

US Planted Acre Intentions  (million acres)

2021        2022        2023

Corn            93.3        88.6        92.0

Soybeans         87.2        87.5        87.5

Wheat            46.7        45.7        49.9

• The USDA March 1 Stocks estimates are bullish, especially for soybeans, with new highs forecast this summer in Chicago futures. Cash soybean basis and premiums should lead the rally. Cash corn prices correctly indicated that US old crop corn stocks are much tighter than forecast with WASDE to raise its feed/residual use by at least 100-150 million bu in May. We do not see the 92 million acres of new crop corn as being bearish below $5.50 December futures. However, weather forecasts must indicate too wet or too cold weather to sustain a rally above $5.80. We maintain that rallies to $6.00-6.20 December on weather scares offer new sales opportunities. Soybeans will most likely gain on the grains.

• HEADLINES: Markets relax, prep for NASS data; EU balance sheet released in error this morning; US dollar testing mid-March low.

• Chicago ag markets are steady to lower midday as the complexity of markets, changing Russian policies, less than ideal weather in the US and abnormally strong interior basis levels, take a back seat to NASS stocks & seedings data due Friday. We reiterate that acreage estimates vary wildly, with some even forecasting a fairly sizable change to winter wheat seedings, and there is no doubt volatility will be massive in the last two hours of trading tomorrow. We do note that winter wheat seedings rarely change from January to March, which implies some 3.7 million acres have been stripped from row crop production. We also note that acreage enrolled in the CRP program at the end of February totalled 23.0 million, vs. 22.1 million last year and vs. 20.07 million in winter 2021. One crop will be left without needed expansion.

• Also lingering in the background is additional weakness in the US dollar index, which this morning is testing the lows of early March at 102.2. A close below 101.9 opens up additional downside risk, chart-wise, and a test of January’s lows are probable in the next 30 days.

• The exit of index funds from the US ag market have largely been a function of a rising dollar/rising interest rates, and whether this trend is reversed is important. Crude oil midday is up $0.80/barrel. The Dow is up 50 points and scored a new weekly high this morning. Fears of banking sector issues/liquidity have been eased.

• US export sales in the week ending March 23 were broadly in line with previous expectations. Corn sales totalled 41 million bu, vs. 122 million the previous week, amid a relative slowing of Chinese purchases. Note that sales of just 18 million bu/week are needed to validate USDA’s annual target, and as another 178,000 mt of old crop US corn were sold to China this morning, it is likely that weekly sales during the summer months must average only 10-12 million bu, a slow but reasonable pace even assuming record large Brazilian production.

• US soybean sales through the period totalled 13 million bu, vs. 6 million the previous week. China last week secured 5.6 million bu of US origin beans. Meal sales were an 18-week high 378,000 mt, vs. 121,000 the previous week. Wheat sales totalled 6 million bu, mostly HRW & SRW, vs. 5 million the prior week.

• For their respective crop years to date, US exporters have sold 1,416 million bu of corn, down 33% year-over-year but a rather normal 77% of the USDA’s annual forecast. Exporters have sold 1,828 million bu of soybeans, down 10% from last year, and 662 million bu of wheat, down 5%.

• Paris milling wheat futures have reversed early morning gains. The EU Commission’s initial supply/demand update was published in error. EU wheat stocks were actually raised 1 million mt to 18.6, not lowered 2.6 million. EU wheat exports were left unchanged at 32 million mt.

• For reference on Friday, the trade’s average guess on March 1 US corn stocks is 7.5 billion bu, vs. 7.8 billion last year, with soy stocks pegged at 1.7 billion, vs. 1.9 billion year, and wheat stocks at 930 million bu, vs. 1.03 billion last year. Corn acreage, on average, is estimated at 90.9 million, vs. 88.6 million in 2022, with soy at 88.2 million, vs. 87.5 million last year, and all-wheat acres at 48.9 million, vs. 45.7 million in 2022. The wide range of estimates implies the potential for intense price movement just after the data’s release. The expansion of Midwest winter wheat acreage, and associated plans to enlarge double cropped soy production, implies the potential for a bullish surprise in corn seeding intentions.

• The midday GFS weather forecast is similar to the overnight run in projecting heavy rain/snow across the N Plains, E Midwest and Delta into April 6-7. Warming occurs briefly in the Midwest early next week but below-normal temperatures resume thereafter. Freezing lows persist across the N Plains into mid-month.

• The burden placed on US weather this summer will be fine-tuned Friday morning via stocks and seedings intentions. Premium can’t be shed entirely until early July crop ratings are published. Volatility provides opportunity over the next 45-60 days.

• HEADLINES: Markets stay firm but drop from session highs; Ethanol data uneventful; US gasoline demand rising.

• Chicago ag markets are firm but off session highs at midday. May Chicago wheat tested multi-week highs early but failed to find follow though above $7.30, the contract was also unable to break through its 50-day moving average. The US dollar finding support above 102.5 is also noted. Money flow and chart patterns will be driving price discovery into the release of NASS stocks & seedings data. However, there is still no signal that markets are oversupplied. Paris milling wheat is up €4.00/mt. EU corn and wheat markets are again inverted. EU rapeseed has rallied another €9.00/mt and is now €61/mt (15%) above its low scored just last week. US exporters sold another 204,000 mt of corn to China this morning, bringing announced sales to China above 3.0 million mt since mid-March.

• The US’s energy balance sheet is beginning to tighten seasonally. Crude oil stocks less reserves on March 24 totalled 474 million barrels, down 7 million week on week. Motor gasoline stocks totalled 227 million barrels, down 3 million from the prior week, down 5% from last year and the lowest for late March since 2014.

• Most important is that gasoline use has seemingly recovered and has expanded in each of the last two weeks. Gasoline disappearance in the week ending March 24 was 9.15 million barrels/day, a 5-week high and up a sizeable 8% year on year. Note that gasoline use rises seasonally throughout the April-Sep period, and the (relative) cooling of retail prices since last summer should allow for additional growth moving forward.

• US ethanol production last week was an uneventful 295 million gallons, up just 2 million on the previous week and slightly below the pace needed to hit USDA’s target. But a rapid drawdown in stocks lies ahead, which in turn requires at least a modest boost in grind rates April onward. The spot ethanol swap market today is unchanged at $2.24. The forward market has rallied to $2.29, basis July, which keeps profitable margins intact. Note that July ethanol two weeks ago was trading at $2.10-2.12/gallon.

• A mixed closed is anticipated, with overhead resistance in corn/wheat established near today’s highs. Next resistance in May soy lies at $14.90.

• The midday GFS weather forecast is similar to the overnight run in projecting massive snow totals across the Northern Plains & Upper Midwest next week and additional heavy rainfall in the eastern Midwest this weekend and again next Tues-Thurs. It remains that temperatures will warm at least briefly across the Central Plains and Midwest into April 6, and on balance soil temperatures in the heart of the Corn Belt will be closer to normal by mid-month. Yet, our primary concern of snow/cold in the north and exceptional drought across the southern Plains don’t look to be eased in the next two weeks.

• The exits of Cargill and Viterra from Russia suggest the government there aims to more strictly control food markets, and overall Russia appears to have become a less reliable market for at least spring/early summer delivery. Near-term corn/soy direction hinges upon NASS data on Friday.

• HEADLINES: Grains struggle at chart resistance; Soybeans break through 200-day moving average; Snow added to Nebraska.

• Global grain futures are mixed at midday, as Chicago corn and wheat in the US and Europe collide with chart-based resistance, while the soy complex continues its recovery from last week’s lows. Soy futures are up 11-20 cents, with spot meal up $10 per ton. It is difficult to find the catalyst for new soy buying amid ongoing erosion in Brazilian basis levels, but processing margins remain elevated and Central IL basis this week sits at $0.35-40 over for nearby delivery. Cash beans in the heart of the Midwest are again valued at $15/bu. KC’s premium to Chicago wheat has widened to $1.70/bu as 10-day forecasts are entirely void of precipitation in TX, OK, KS and CO.

• FAS’s daily reporting system included another sell of old crop corn to China worth 136,000 mt. Announced sales to China since mid-March now total 2.89 million mt, and assuming Monday’s sale to unknown destinations was China the total surpasses 3.0 million mt. China’s newfound relationship with Brazil assures China buys Brazil corn beyond summer, but not until then.

• Spot Argentine fob basis this week sits at $0.90-1.00/bu. It is common for Argentina’s cash corn market to surge in Jan-Feb as remaining supplies are rationed, but key is whether basis there begins to relax in the next 1-2 weeks. Ongoing strength in Argentine basis in the first half of April will underscore just how tight that market will be between now and June. The message is that US corn is the world’s top reliable origin nearby.

• Additionally, the spot ethanol swap market has rallied to a new 12-week high at $2.24/gallon. A normal seasonal increase in gasoline use and ethanol grind lies ahead in spring and early summer. US ethanol stocks have likely peaked for calendar year 2023.

• The US dollar index is down 0.25% at midday, and a close below 102 opens the contract up to a more bearish landscape. Index fund selling has been directly correlated with currency/interest rates, and as has been the case over the last 9 months, macro markets’ impact on ag price discovery stays elevated.

• The midday GFS weather  forecast is wetter (snow) in NE and SD next week but is otherwise consistent with the morning run. The GFS forecast  is in general agreement with its EU counterpart in projecting heavy snowfall upward of 10”+ across the Central and Northern Plains and Upper Midwest next week. Abnormally heavy snow cover keeps temperatures cold across the Northern US. A favourable warmer pattern emerges in the Delta and Midwest next week, with highs in IA/IL reaching into the upper 70s/low 80s. But our chief concern remains that of winter’s extension across the Northern Corn Belt and the complete lack of soil moisture across the HRW Belt.

• The market has dialed in an expansion of corn area in 2023 worth 2-3 million acres, which if it occurs keeps US soy and wheat balance sheets tight. And even the global corn balance only loosens with record US yield.

• HEADLINES: Markets rally on Black Sea uncertainty, Fund short covering; Additional heavy snow possible in Northern Plains next 10 days.

• Global ag markets have shrugged off morning weakness and are trading higher by varying degrees. Wheat has paced the advance on a percentage basis as speculative short covering accelerates, amid rising Black Sea tension, and even Paris milling futures are participating. We hear from Black Sea contacts who suggest that forward selling/pricing in Russia has slowed considerably following talk last week that the government will act to buy supply for its reserve, establish a floor price or be more active in restricting exports. We have no way of knowing the pace of spring/summer Russian grain exports, but it does appear that, on balance, Russia has become a less reliable market. There is also widespread talk that corn quality in Ukraine is in rapid retreat, which is a concern for EU importers and also implies comparing Gulf basis to Black Sea basis on Ukraine’s remaining supply is less valid.

• Spot WTI crude is up $2.00/barrel at $71.30. The Dow at midday is up 170 points.

• New crop contracts are leading row crop markets as focus shifts to the 2023 US acreage matrix. Recall winter wheat seedings last autumn were up 3.7 million acres year on year, and that wheat area expansion spilled into the principal Midwest suggests some crop will be left without.

• Work on expected returns validated the Outlook Forum’s call for enlarged corn seeding, but beans may need area expansion more. Spring wheat is also need of larger seedings as HRS stocks/use this year sits at the lower end of history. Planting intentions on Friday will be a big deal.

• US exporters in the week ending March 23 shipped 26 million bu of corn, vs. 47 million the previous week, 33 million bu of soy, vs. 26 million the previous week and 14 million bu of wheat, unchanged from the prior week. Corn inspections were lower than expected. Soy and wheat were line.

• For their respective crop years to date, the US has inspected for export 1,376 million bu of corn, down 34% year on year, 656 million bu of wheat, down 5%, and 1,818 million bu of soybeans, up 8% from last year. There is no compelling evidence to suggest USDA revises its annual forecasts in its April report. The pace of physical corn exports must increase rather quickly, but recently sold bushels will be exported from mid-spring to early summer. A boost in corn shipments is anticipated in April.

• Additionally, Plains corn basis at $1.00+ and firming Midwestern bids suggest that feed operations are again being forced to pull supply from farther afield.

• The midday GFS weather forecast is slightly further north with soaking precipitation this weekend as totals of 1-3” have been moved into IN and OH, but otherwise the outlook is consistent. A warming temperature pattern lies ahead for the S Plains, Delta and S Midwest beginning early next week, but additional snow across the N Plains and Upper Midwest will keep temperatures there well below normal. Zero/sub-zero lows are forecast in the Dakotas and MN into Thursday. Very heavy snow (10″+) is possible in the Northern Plains Sat-Wed. Zero precipitation is offered to the Plains HRW Belt in the next 10 days.

• Markets have run out of sellers as critical US stocks and seedings data looms. Already our work suggests Plains wheat yields will be sub-trend and row crop seeding requires soaking rain in the next 30 days. This along with a developing arid pattern in Central Brazil keep breaks supported nearby.

• HEADLINES: Chicago futures soar on spec short covering, Uncertainty over Russian grain flows.

• Global ag markets are sharply higher at midday as Russian comments regarding future wheat exports collide with general uncertainty over the Black Sea corridor during the summer months and the looming 2023 Northern Hemisphere growing season. Short covering has been the theme as wheat and corn pace the rally on a percentage basis. Spot Paris milling is up €12/mt (equivalent to $0.35/bu), with May again priced at a premium to Sep. Rapeseed futures in Europe are up €18-20/mt as that market’s RSI fell to the lowest level since summer 2013.

• Russian statements have been fine-tuned and an outright halt to exports is unlikely. Rather there is support for keeping fob offers above $275/mt (today’s price) to assure farmer profitability, and the previously mentioned reserve stocks lingers in the background. However, the Russian Ag Minister has yet to comment and there is just no way to be certain about Russia ag policy given bans in previous years. A slowing of exports from Russia makes little sense fundamentally, geopolitics stay front and centre indefinitely. A price floor does imply limited downside risk in US/EU wheat futures.

• US exporters this morning sold another 204,000 mt of corn to China for old crop delivery, bringing total Chinese purchases since mid-March to 2.57 million mt. Recent sales to China and others elevate the pace of physical exports in spring and early summer. We would expect this corn to ship prior to the arrival of Brazil’s safrinha corn harvest in July. Spot corn basis in Central IL is up to $0.33 over May Chicago, vs. $0.30 over Thursday and $0.15 over in late March a year ago. March 1 corn stocks data, to be released next Friday, is important.

• Spot Brazilian fob basis overnight fell another $0.05/bu, with Brazilian beans for April-May delivery quoted $55-60/mt below US Gulf origin. The Brazilian market faces record production and logistical (road) issues in major producing areas, which has triggered long-expected concern over producer storage capacity. The Brazilian cash soy market must stabilise before new length is added to Chicago soybeans on a lasting basis. But we would note that Brazil’s ship line-up is rising quickly, and excess stocks should be cleared by late summer. Keep in mind Argentina is likely to source some 8-10 million mt of soy from Brazil, which trims Brazil’s non-Mercosur export potential.

• Other news is lacking, and macro markets lean slightly negative. The US dollar index has stabilised at initial chart-based support. Spot WTI crude is $1.30/barrel at $68.70 with RBOB gasoline following. The Dow is flat, with European equity indexes down 1.5% amid fears of banking sector liquidity there. We look for a strong close today, but still caution against chasing daily moves until NASS stocks and seedings data has come and gone.

• The midday GFS weather forecast is wetter in the western Midwest into late next week but warmer and drier thereafter. Heavy rain is projected this weekend across the Delta and Central/Eastern Midwest. Heavy snow is forecast in NE, SD, IA, MN and WI next Wed-Fri. Moisture equivalent totals in the next 7 days are pegged in a range of 1-6”, with the greatest amounts favouring the mid-South and southern Midwest.

• The GFS forecast is favourably warm/dry in the 11–15-day period. This pattern change will be welcomed, but the EU model must follow with a similar forecast this afternoon. Central US weather takes on more importance beginning next week.

• The world enters the 2023/24 crop year with very tight corn and soy stocks, while adequate wheat supplies have been largely a function of abnormally high yields in Russia last summer. A pause/end in US Fed rates hikes is important. Whether stocks are allowed to build requires an absence of N Hemisphere weather threats and it is premature to count on US yield growth.

• HEADLINES: Funds continue shedding soy length; Corn export sales soar; KC-Chicago spread nears 2011 high.

• Net liquidation continues in global ag markets as funds shed what are still sizeable net long positions in soybeans and meal. We estimate that managed fund length in soybeans this morning sits at 90,000 contracts, with meal length at 110-115,000. Funds have shed nearly 100,000 contracts of net length in soybeans, but additional selling is possible until there are signs of a bottom in Brazil’s fob market. Spot Brazilian beans are offered for April delivery $0.75 under the board, which reflects a new low in basis there. Ultimately, adequate export demand will be found in Brazil and crush in Mato Grosso and Mato Grosso do Sul will be maximised amid the need for meal and slowing crush rates in Argentina. But cash markets are king and Brazil’s soy market remains weak. We also hears of 1-2 cargoes working into the South-eastern US as Brazil’s discount to US Gulf origin reaches $60/mt ($1.60/bu).

• May corn’s failure to trade above its 20-day moving average for any length of time keeps chart-based weight intact. Chart patterns and money flow have dominated daily price discovery.

• US exporters in the week ending March 16 sold a net 122 million bu of corn, above expectations, and the largest total since mid-March 2021. Chinese purchases were known, but sales to non-Chinese destinations were 33 million bu. Recall sales must average only 24 million/week to meet the USDA’s target and we would suggest that US corn exports will be raised within the May or June WASDEs. Exporters sold another 123,000 mt to China this morning. Dire drought in Argentina, and probably final production there of 30-35 million mt, opens the door to sustain enlarged US corn exports throughout spring and early summer. A large Brazilian crop is needed to funnel global demand back to S America July onward.

• US wheat export sales totalled just 5 million bu, vs. 12 million the previous week. Soybean sales totalled 6 million, vs. 254 million the prior week. Both were below expectations. For their respective crop years to date, the US has sold 1,376 million bu of corn, down 34% year-on-year but a rather normal 74% of the USDA’s forecast, 1,818 million bu of soybeans, down 8%, and 656 million bu of wheat, down 5%. The USDA is unlikely to revise US export forecasts in its April report.

• The US dollar index has fallen another 0.3% to 102.1, with initial chart-based support now just under the market. The Dow is up 330 points as equity markets cheer a likely end to Fed rate hikes. Crude/gasoline markets are mixed, but dollar weakness and coming seasonal demand have kept spot WTI crude above $70. The outlook for US energy demand in late spring/summer is positive as retail gasoline prices above $4.00, on a national basis, will be avoided this year.

• The spot KC-CBOT wheat spread at $1.58/bu is nearing 2011’s record ($1.73). Additional upside exists as little/no subsoil moisture exists currently across the HRW Belt and limited relief is projected into the first week of April. Abandonment rates soar if this pattern stays unchanged into mid-April, which appears likely.

• The GFS weather forecast is a bit wetter across the southern Midwest, with two major systems forecast in the next 7-8 days. Cumulative precipitation worth 4-7” is possible in MO, southern I, IN, OH and pockets of KY. Heavy snow is offered to NE, IA and WI next Thurs-Fri. The Southern and Western Plains stay arid.

• The speculative community’s mantra since late Feb has been to get smaller or get out entirely. We view prices of US corn, soy and wheat as undervalued given the need for at least trend yields in 2023. Dryness in the Plains, snow in the Dakotas/MN and inundating precipitation in the E Midwest argue against early planting dates.

• HEADLINES: Wheat, soy extend decline; nearby corn, soy spreads continue rally; Spot wheat-corn spread drops to $0.35/bu.

• Wheat and soybeans have extended this week’s collapse based broadly on international cash markets. The Brazilian soybean pipeline is full, with talk of elevators in Parana halting near-term purchases amid full bins. The European wheat market continues its leak lower as exporters there work to clear old crop stocks, while Russian wheat remains priced to sell at $275-280/mt, basis fob, which compares to $300 in late February. Brazilian soy exports have been slow to build since early Feb, but we would remind that basis at Paranagua tends into bottom seasonally by mid/late April and the market there should find balance in the weeks ahead as exports accelerate. Additionally, the Chinese pig market has stabilised following weakness late February’s decline. We maintain that the intensity of speculative selling/liquidation is not aligned with fundamentals. Note that nearby spreads continue to perform, with May-July Chicago corn now at $0.20/bu and May-July soy at $0.22.

• Spot WTI crude is up $0.50/barrel at midday and has crawled back above $70. Spot RBOB gasoline is up $0.50/gallon following a rather steep decline in stocks last week.

• US motor gasoline stocks on March 17 totalled 229.6 million barrels, down 6.4 million from the previous week and down 4% year-on-year. Total gasoline disappearance last week totalled 62.7 million barrels, vs. 60.2 million the previous week and up 4% on the prior year. Retail gas prices are not high enough to discourage driving and a normal travel season is anticipated this spring and summer.

• US ethanol production in the week ending March 17 totalled 293 million gallons, down 5 million from the prior week and 6 million below the pace needed to hit USDA’s target. There is nothing special in weekly/monthly US ethanol data, but stocks have peaked and will be drawn down rapidly over the next 3-4 months. Margins are slightly profitable and a normal seasonal boost in weekly ethanol grind rates occurs in May, June and early July. We are in agreement with USDA’s projected ethanol demand draw at 5,250 million bu.

• This conclusion of this week’s Fed meeting this afternoon will be the most closely scrutinised in months. Rate hikes were guaranteed throughout summer, autumn, and winter, but a trickier balancing act lies ahead. There are various reasons for the failures of Silicon Valley Bank and Credit Suisse, but there is no doubt the falling value of long-term bonds is stressing the US and global banking sectors. The market anticipates a hike in US benchmark rates today of 0.25%, but if the Fed opts to keep rates unchanged a flood of money is likely to enter the raw material space into mid-spring. The S&P 500 is flat at midday.

• The Central US weather pattern looks to stagnate into the first week of April. Heavy rainfall upward of 3-6” is forecast across a band stretching from southern MO to OH this weekend. Additional snow will be scattered across the Central Plains and Midwest March 28-29. Frigid temperatures stay in place across the PNW, N Plains and Upper Midwest throughout the next 10 days. A drier and much warmer climate profile will be required soon thereafter.

• The GFS weather forecast is like the morning run in calling for lingering heavy shower activity across Argentina into the weekend, while meaningful precipitation in Brazil stays confined to Mato Grosso and RGDS in the far South. The outlook remains favourable in that yield loss in Argentina is stabilised, but unlikely to improve, while dryness in Central Brazil facilitates safrinha corn seeding.

• Spot Chicago wheat’s premium to corn has fallen to just $0.35/bu, which is historically cheap. Spring/summer end user coverage is recommended at current levels. There is very little weather premium built into price currently, and the importance of US weather this spring and summer cannot be overestimated.

• HEADLINES: Wheat drags row crops lower; Talk of Argentine corn crop below 35 million mt; GFS colder in US Plains.

• Chicago ag markets have leaked lower this morning amid a new round of speculative selling in global wheat markets and on otherwise lack of fresh news. Equity and energy markets remain firm, but Central Banks’ commitment to make depositors whole has been digested. Our bet is that the eyes of all market will be on Wednesday’s Fed meeting wrap up as there is no longer a guarantee that rates are hiked, and as usual Chairman Powell’s commentary will be dissected considerably.

• Wheat markets in the US and Europe just can’t shake weakness in the Russian market, where fob quotes for April-May delivery have fallen to $283-285/mt. Russian origin wheat is again the world’s cheapest. Spot Paris milling wheat has posted newer 18-month lows. Exporters are working to clear remaining old crop supplies at a time when world import demand shrinks seasonally due to looming harvests in North Africa, the Middle East and India. EU corn futures have followed. We also note rapeseed futures in Paris have fallen to two-year lows as that market digests adequate supplies and a probable boost in Ukrainian oilseed/vegoil production in 2023.

• Choppiness will continue until there is clarity on US production potential, which begins with the release of planting intentions next Friday. We continue. to recommend end user coverage on weakness. We hear discussions that final Argentine corn production may drop below 35 million mt, which forces world trade on US and Brazilian exporters throughout the next 12-13 months. Safrinha seeding in Parana this week is 77% complete, and corn to be planted in the next 10 days will pollinate in very late April/early May. A record Brazilian corn crop is probable, but weather there matters over the next 7-9 weeks.

• IHS Markit estimates new crop US corn seeding at 90.9 million acres, vs. 87.5 last year, new crop soybean acres at 88.2 million, vs. 87.5 million last year, and all-wheat seedings at 49.2 million, vs. 45.7 million last year. IHS Markit’s soy acreage number is 700,000 above USDA’s Outlook Forum guess, but corn and wheat are little changed. There is broad consensus that total major crop area this spring will expand 6-7 million acres year-on-year, but like always this will hinge upon favourable spring conditions across the Northern Plains. It is far too early to be concerned about snowpack there, with prevent plant dates still two months away, but updated two-week forecasts feature additional snow and freezing overnight lows. The midday GFS weather forecast projects snowfall upward of 4-10” in the next 72 hours. Frigid temperatures return to the Northern Plains next week.

• US exporters sold another 136,000 mt of corn to China. Weekly corn sales on Thursday are expected in a range of 55-65 million bu.

• The midday GFS weather forecast is consistent with the morning run. Soaking rain begins to replenish soil moisture in Central and Northern Argentina, with a 5-day period of steady rainfall to begin in the coming hours. Cumulative totals of 2-3” will be widespread. The rain is no doubt welcomed, but early harvest efforts will be obstructed. Meaningful Brazilian rain stays isolated to Mato Grosso. Dryness elsewhere is favourable given the need to finish soy harvest/safrinha corn planting in Mato Grosso do Sul and Parana. There is no indication that Brazil’s wet season ends prematurely.

• Lasting direction is unlikely until US stocks and seedings are known. Don’t chase daily moves. There remains a need for weather premium given the importance of US production expansion in 2023.

• HEADLINES: Chicago recovers from morning lows as equity markets rally.

• Chicago ag markets are mixed at midday, with nearby corn and soy spreads continuing to perform and with wheat markets again digesting stagnation in Russian interior and fob prices. Russian wheat is still buyable at $290/mt, basis spot, while Russian interior prices this week are unmoved. Ukrainian ports are operational. Concern over Black Sea exports this summer is elevated, but grain is moving today.

• Crude oil markets in the US and London have pared losses, with spot WTI down $0.60/barrel, some $2.00 above morning lows. The Dow at midday is up 300 points as global Central Bank policies give stability to financial market liquidity, and as the US banking sector is likely to draw investments from riskier institutions in emerging markets. Macro markets’ reaction to the rescue of Credit Suisse overnight lean slightly positive but, overall, the macro landscape has become somewhat complex as governments must combat both inflation and liquidity. Risk aversion will be a theme for some time to come.

• US export inspections in the week ending March 16 were positive for corn and beans and uneventful for wheat. Corn shipments totalled 47 million bu, vs. 40 million the previous week, a new crop year high and 4 million bu above the pace needed to meet the USDA’s forecast. USDA’s forecast is now seen as 25-50 million bu too low if for no other reason than the gathering of Argentina’s crop won’t be completed until August. Soy shipments totalled 26 million bu, vs. 23 million the previous week and a three-week high. Soy exports since late Feb are near unchanged from last year despite record Brazilian production. Wheat shipments were 14 million bu, vs. 9 million the previous week.

• For their respective marketing years to date, the US has shipped 690 million bu of corn, down 36% year-on-year, 598 million bu of wheat, down 2%, and 1,619 million bu of soybeans, up 3% from the previous year. Corn inspections must average 43 million bu to meet USDA’s target. Soy shipments must average only 14 million bu.

• The Central US forecast at midday is colder and snowier in the Northern Plains and Upper Midwest than previously. Snowfall of 1-6” is offered to the Dakotas and MN in the next 72 hours. A second event is forecast Sat-Mon with similar accumulation probable. A needed warmer temperature profile evolves across the heart of the Midwest by late week, but the intensity of current and upcoming snowpack across the north will sustain abnormal cold there. Freezing temperatures linger in the Dakotas, MN, WI and parts of MI into April 2.

• Soaking Argentine rainfall is imminent, with the GFS projecting widespread totals of 1-4” in Cordoba, Santa Fe and Entre Rios Tues-Fri. Argentine rainfall at this point is less important for corn and soy yields, but a full replenishment of soil moisture is needed prior to wheat seeding in May. The Brazilian outlook remains largely favourable as the wet season persists across Central and Northern areas, and needed dryness impacts Parana and Mato Grosso do Sul. The duration of coming dryness in Southern Brazil does warrant attention as some 20% of safrinha corn in Parana remains unplanted. Weather there and in Mato Grosso matters until late April.

• Funds have shed sizable grain market length, while index funds’ net wheat long at 87,000 contracts is the smallest on record. It is clear risk-off has dominated strategy since mid-February. But normal seeding dates and favourable Central US weather this summer are needed to build global stocks in 2023. Volatility will continue.

• In the EU MARS, the EU’s Monitoring Agricultural Resources unit, reported this year’s average soft-wheat yield is seen at 5.99 mt/ha, up from 5.8 mt/ha last year, they added:-

• Winter-crops are in fair to good shape across most of Europe, after the mild winter.
• Still, there is a severe rain deficit in southern Spain and Portugal, with water reservoirs for irrigation very low.
• Soil moisture is also low in countries including Romania, Bulgaria and Hungary, necessitating spring rain to aid crops.
• Crop yield estimates as follows, in tons per hectare: