May corn -3 at 5.355
May beans -8 ½ at 14.05
The DOW is UP
USD is UP
Crude oil -.04 at 65.98
Overnight grain markets featured selling in corn and the soy complex while wheat traded slightly higher. It has been a down week across the grains with the exception of soybean oil but even bean oil is trading lower early on today. Canola is trading -5.5 lower while Malaysian palm oil closed +1.6% into a new high. The dollar is trading 42 pts higher after a three day correction lower. Daylight savings begins this weekend and the first day of spring is next weekend.
Weather leans bearish at the moment with a substantial soaking over the coming days to aid the US winter wheat crop as it greens up and for much of the corn belt just ahead of the row crop planting season. Argentina’s forecast offers promise of relief for crops struggling under another stretch hot/dry conditions. Brazil soybean harvest and second corn crop planting continues to advance, even if well behind normal timings. Recent crop projections have seen Argentina’s crop getting smaller and Brazil’s bigger. The forecasted rains have the potential to stabilize Argentina’s slipping crops and Brazil’s soybean production is becoming more defined with a record crop that can be argued 1-3 mmt on either side of 133 mmt while it will be a wait and see on the late safrinha corn crop potential.
The cash markets are very quiet. Soybean barge basis has been soft this week while interior basis remains steady/firm at historically elevated levels. The futures can shake around at a time with limited news to influence market sentiment, but the soybean market only is marking time for now with an eye on the crop reports at month’s end and a tight supply story that is not going away any time soon.
March futures go off the board at noon. Spec position limits are set to double on Monday likely bringing increased market volatility as the grains will have to accommodate the larger fund positions.
Overnight, the corn market maintained a modestly defensive posture, finishing 3-4 cents lower by the morning pause. Heading into “Big Friday”, May Corn is nursing modest losses, while the new crop Dec is closer to unchanged. March futures will expire at noon today with no deliveries yet recorded. The transition to the May contract Monday could present some interesting technical possibilities on the weekly chart? Today is a relatively quiet news day, but no doubt Sunday night will be hopping as the market eyes potential weather outcomes in Argentina. Next week is expected to be a wetter one for the country, and this rain is seen as critical to stabilize conditions after a hot and dry month. Only 17% of the corn crop is now seen Good-Excellent while 28% is Poor-Very Poor, down from 25% G-E and 16% P-VP the prior week. Safrinha planting remains an issue in Brazil, too, as we veer outside the optimal window (think planting U.S. corn in June). Another issue of note is an apparent upswing in African Swine Fever chatter in China, which has helped to significantly break Dalian/China meal markets (corn is down, but not nearly as much). The side benefit has been stronger hog prices here in the U.S. Both hog and ethanol producers have seen good weeks overall, marked by improving margins and better demand.
Darren, David, and Elizabeth