- Soybeans were well under the overnight highs through Monday’s trade, but did not follow the grain markets lower at the start of the week. At the close, soybeans were 1-2 cents higher for the day, though funds were estimated sellers of 6,500 soybean contracts. In soy product markets, funds sold 3,500 soymeal and 5,500 soyoil contracts. Soybean export inspections were supportive with a weekly total of 48 million bu, a marketing year high for the year. This also marked the second consecutive week of shipments that were above last year. 27 million bu (57%) of the weekly total were loaded for China. The cumulative total for the year now stands at 920 million bu versus 1,388 million bu a year ago. Weekly inspections are expected to remains strong for the next month as recent old-crop sales are expected to be loaded out immediately. Old crop export estimates will be moved higher in the coming weeks, but US stocks will remain historically large.
- Corn futures were under pressure right from the morning open on Monday, pulled down by the sharp drop in the wheat market. At the close old crop, contracts were 4-5 cents lower with funds estimated sellers of 25,000 contracts of corn through the day. Estimated ethanol plant margins continue to flip back around break even. The average estimated Cornbelt margin has held in a couple of cent range around break even since December. Margins this week are estimated at $.02/gal versus $.22 a year ago. The trade remains optimistic of not just corn exports to China, but also ethanol and DDG’s to help support US ethanol margins. Several levels of technical support come together on the spot corn chart just below the market at $3.67-3.68, where the 200-day moving average and an open chart gap left back in December.
- US wheat futures fell to fresh contract lows with massive fund sales reported by Chicago brokers. The end of the month looms, but funds are piling into a sizeable net short wheat position as chart patterns have turned bearish. KC spot wheat futures are now at their lowest level since January 2018 with the next downside price support area being $4.30 basis March KC futures. Chicago wheat futures has a downside price target of $4.50-4.55. Funds sold an estimated 15,000 contracts in ChIcago wheat, one of the largest, in a single day in years.
- The US exported 25.5 million bu of US wheat in the week ending Feb 21. Crop year US wheat exports at 604 million bu are down 53 million bu/8% from last year. The spot KC wheat/corn spread has pushed down to $.72/bu wheat premium, the weakest since early 2017. HRW wheat is almost working back into Plains feed rations. It is hard to understand why the US would need to feed wheat with HRW 2019 seeding at a 110-year low.