- Soybeans were on both sides of unchanged at the start of the week, before ending near the lows of the day. Markets rallied overnight on hopes that US/China trade dispute could be avoided, but May beans struggled above last week’s highs, on profit taking ahead of this week’s key USDA reports. Weekly export inspections were at the top end of expectations last week, and totaled 21.5 million bu. The cumulative inspection total for the year remains 12% behind last year; though, the previous four week total has been similar to a year ago and near the five year average. Brazil is now exporting more than 2 million mt/week, which will keep US exports seasonally slow into the summer. The Brazilian export program should begin to wind down in July, when we expect the US program to pick up. Key USDA reports are now three days out, and we look for choppy trading to unfold into the report release. Ahead of the US growing season we expect spot soybean prices to hold above $10.00.
- Chicago corn futures erased overnight gains amid a lack of any new export sales and as producers in the Delta/Southeast did well to maximize planting progress over the weekend. The crop in Louisiana is 63% planted, vs. 74% last year and 46% on average. However, fieldwork in the south will halt completely over the next ten days as excessive rain triggers regional flooding in LA, AR, MS, MO and parts of TN/KY. .Much of the moisture forecast in the latest NOAA five day forecast falls within a 72-hour window. Otherwise, stocks, new crop acreage, and the end of the month and quarter align on Thursday. We place managed funds’ position this evening at 208,000 contracts, large enough to give the bulls pause but also a position that is likely to be defended through the early part of summer. It is unlikely that planting intentions exceed 89.5 million acres, vs. final area of 90.2 million in 2017/18. As such trend/above yield is required to maintain 2018/19 end stocks above 1.9- 2.0 billion. Clarity over N Hemisphere weather is needed.
- US wheat futures settled 5-11 cents lower, led by Kansas, as radar maps showed light rains working across Western OK and Central KS. Crop conditions, however, are little changed, rapid deterioration has occurred since late autumn. Dry weather continues across the Western HRW Belt into the first full week of April. Funds sold an estimated 4,000 contracts in Chicago. Good/excellent ratings in KS this week are pegged at 13%, vs. 11% last week. Good/excellent in OK rests at 9%, vs. 5% last week, but both remain historically low for mid/late March. Nationwide crop conditions will be reported next Monday, and US winter wheat ratings are expected at 35-38% good/excellent, vs. 51% in early April a year ago. A rail worker’s strike in France and bottlenecks at Russian ports have sent world cash offers higher with French/ German prices finding new seasonal highs at $209-213/mt. Comparable Gulf HRW this evening is offered at $219-221, still lofty but its premium is narrowing. Work suggests that 5-6”of precipitation is needed in Mar-Apr to maintain trend HRW yield, a number that looks nearly impossible this year. Strong support is pegged at $4.60, basis May Kansas futures, at which point the US competes on paper for world market share.