- 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.