CORN HIGHLIGHTS:

• The corn market used the strength in the wheat market and South American weather concerns to finish higher on the session. May corn gained 2 cents and closed higher for the third consecutive day.
• Technical indicators are showing some upward momentum building in the corn market. Short-term moving averages are looking to cross over, which could add additional short covering. May futures are challenging a key level of resistance around 440.
• Weekly export inspection for corn have remained strong in this window. Last week, US exporters shipped 44.2 mb (1.122 mmt) of corn. Corn inspections are running ahead of the pace needed to reach USDA export targets, and up 33% over last year for this time.
• Brazilian second crop (safrinha) corn planting is progressing quickly. Ag consultant group, AgRural, estimates that 93% of the second crop corn is planted, up 6% over last week. This is well ahead of last year’s pace of 82% for this time.
• Brazil’s weather will stay a focus in the corn market. Forecasts for a ridge of heat building over central Brazil later in the week help support Brazilian and US corn prices. If weather conditions become less favorable, additional weather premium may be added into the corn market.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower following impressive gains from Friday’s WASDE report despite the lack of much change from last month’s report. Soybean meal ended the day lower which was the main factor that brought soybeans lower, but soybean oil closed higher.
• The USDA refused to lower its estimate for Brazilian soybean production much on Friday and only dropped it by 1 mmt to 155 mmt despite many private analysts expecting a number closer to 149 mmt. US ending stocks were lowered by 4 mb and export sales were kept unchanged despite slow export sales recently.
• The Brazilian soybean harvest is now estimated at 55% complete, and the country has been receiving steady scattered showers. Argentine weather has been good as well, but on Friday, the USDA reduced its estimates for total production by 1 mmt for the two countries combined.
• As of March 5, funds sold an additional 11,346 contracts of soybeans which increased their net short position to 171,999 contracts as of Tuesday March 5. As in corn, this position is now likely much lower thanks to the higher move.

WHEAT HIGHLIGHTS:

• All three US wheat futures classes closed higher today, with double digit gains in both Chicago and Kansas City contracts. This comes despite another cancellation announced this morning of US SRW wheat to China for 23/24 in the amount of 264,000 mt.
• Weekly wheat inspections at 14.8 mb bring the total 23/24 inspections number to 491 mb. On last week’s USDA report, they lowered their estimate of 23/24 wheat exports by 15 mb to 710 mb. This may be due to increased Russian competition as well as the recent Chinese cancellations.
• Wheat was also higher today, despite a higher US Dollar Index, and appeared to form a near term bottom on the chart. This is potentially the result of short covering by the funds, who were short as of last Tuesday about 105,000 contracts of Chicago and KC wheat combined. With a relatively neutral report last week, traders may be feeling more confident about buying into the market.
• Also aiding wheat today was a higher close for Paris milling wheat futures. The Matif wheat contracts were able to rally above resistance at the 21-day moving average and were also able to close above it in September contracts forward. Chicago wheat futures remain below their respective 21-day moving averages, which may act as the next level of resistance.
• The US plains states will see temporary warming before turning cooler again. Some snow will be possible next week in Colorado and the Dakotas. Looking at similar patterns in past years when March had colder than normal temperatures, it led to a dry summer. Although it is still too early to make a call on the weather, this is worth noting.
• Stats Canada released data today in which they estimated all wheat acreage at 27.05 million. This is just above last year at 27.03 million, and above the average trade guess where the market was actually expecting a slight drop. Analyst estimates ranged from 26.00 to 27.40 ma. As an aside, all wheat acreage includes spring, winter, and durum wheat.

DAIRY HIGHLIGHTS:

• Class III prices were mixed on the day with Q1 and Q2 contracts seeing losses while Q3 and Q4 contracts were seeing small gains.
• The dairy spot trade was lackluster with butter unchanged, powder losing a quarter, cheese losing 2.6250 cents and whey gaining half a cent.
• Product futures were little moved after the spot trade. The whey market saw all contracts improving, while cheese futures were in the red.  Butter and powder were both mixed with little movement.
• Class IV volume was nonexistent today with products little moved.

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Author

Amanda Brill