CORN

• The corn market is lower this morning with the front months losing to the deferreds as it consolidates in a 4-cent range ahead of today’s 11 a.m. release of the USDA’s WASDE report.
• May corn futures rallied and closed above the 20-day moving average yesterday for the first time since late December.  There is not a lot of fresh news to drive this rally, possibly indicating that it is a technical correction with short covering in preparation of today’s WASDE report.
• Analysts feel US corn carryout could drop about 17 mb to 2.159 mb in today’s USDA report with slight demand adjustments for ethanol usage or exports. South American production will remain a focus for the trade as well, where the USDA is expected to show little change in Argentina’s crop, but a 1.6 mmt reduction to Brazil’s is anticipated.
• In the USDA’s weekly export sales report, corn sales for the week ending February 29, came in as expected with 43.7 mb sold for the 23/24 marketing year. So far, total commitments of 1.544 bbu are running 28% ahead of last year’s pace with the USDA currently forecasting a 26% increase.
• Managed funds were active in the corn market on Thursday, buying an estimated 6,000 contracts as they covered short positions ahead of today’s USDA report. This brings their total estimated net short position to 343,000 contracts.

SOYBEANS

• The soybean complex is trading quietly mixed this morning with front month soybeans lower than the deferreds, and both soybean meal and oil slightly lower.
• Today’s WASDE report isn’t expected to include any major surprises, but analysts expect that the US soybean carryout will see a slight increased by about 5 mb due to a decrease in exports. The trade will still focus on South American production. Where the Argentine soybean crop is expected to increase slightly to 50.3 mmt, while Brazil’s is expected to decrease to 152.8 mmt, from last month’s 156 mmt forecast.
• Stronger than anticipated soybean sales were reported in Thursday’s USDA weekly export sales report. Sales for the week ending February 29th came in at 22.5 mb for the 23/24 season and 2.4 mb for 24/25. Old crop beans sales marked a 7-week high. Though to date, old crop soybean sales remain behind last year’s commitments by 19% where the USDA is currently forecasting a 14% drop.
• China’s soybean imports for the Jan-Feb time frame dropped to a 5-year low of just 13.04 mmt according to the General Administration of Customs. The drop represents an 8.8% decline from the same time last year. Poor crushing margins and delayed shipments were among the reasons given.
• Like corn, managed funds were active buyers in the soybean complex on Thursday as they covered short positions in anticipation of today’s USDA WASDE report. They bought an estimated 5,000 soybean contracts, 1,500 meal, and 3,500 soybean oil, bringing their total net short positions to 149,000 soybean contracts, 39,000 meal, and 55,000 soybean oil.

WHEAT

• The wheat complex is trading quietly in a 6 – 8 cent range across the complex with Chicago gaining on both KC and Minneapolis as it consolidates from yesterday’s losses ahead of today’s USDA WASDE report.
• Not much change is expected for US wheat in today’s WASDE report. The average trade guess for US wheat carryout is unchanged from last month at 658 mb. The average estimate for world wheat ending stocks comes in at 259.2 mmt versus 259.4 last month. The possibility remains that the USDA may lower US wheat exports from the current 725 mb.
• Thursday morning the USDA reported that China cancelled 2 cargoes totaling 130,000 mt of US SRW wheat. This report confirmed rumors of cancellations that circulated on Wednesday and contributed to the weakness of the Chicago contracts. The market could see another 2 or 3 more cargoes potentially cancelled.
• Thursday the USDA reported 12 mb of wheat were sold for export in the week ending February 29th. The weekly total fell within expectations, and total 23/24 commitments of 677 mb are up 6% on the year, where the USDA is forecasting a 4.5% drop.
• It was reported that Egypt cancelled a tender because of high prices, and in the meantime, Russia continues to export about 1 mmt of wheat per week while non-US exporters compete for lower world demand.
• Managed funds weren’t as active in the wheat as they were in the other pits, buying an estimated 500 contracts of Chicago wheat. Their total estimated short position remains near 85,000 contracts.

Author

Scott Masters