Grains close mixed:
May Corn +5 3/4 cents/bu (6.26 1/2)
May Soybeans – 4 ½ cents/bu (14.89 1/4)
May Chi Wheat + 6 3/4 cent/bu (7.02 3/4)
Cdn $ -0.00420 (72.775 cents)
WTI Crude Oil -3.20/barrel (68.13)
Overall stock market weakness put pressure on the oilseed markets today, while grains managed to pave their own path. Additionally, a strong U.S. dollar, like we are seeing today, makes U.S. commodities less competitive in the global landscape and often weighs on the oilseeds and grains markets. The U.S. dollar and the stock market tend to have an inverse relationship. The U.S. dollar is one of a few currencies that’s considered a ‘safe haven’. When the economy and geopolitical landscapes look worrying, people have tended to buy dollars.
Fed fund futures are trading around even chances for both a 25-basis point increase in their March policy meeting next week, and no change at all; longer-term bets favor the Fed cutting rates by one full percentage point by the end of the year.
This morning we saw a second flash sale of 667,000 tonnes (26.3 million bushels) of U.S. corn for delivery to China in 2022/23. This follows yesterday’s 24.1 million. Cash sources suggest that total purchases may be near 80 million from this round of buying so much of the trade will be looking to tomorrow to see any more confirmations. Prior to yesterday, the last Chinese flash purchase of U.S. corn occurred in April of 2022. Corn has been lacking in export pace from the USDA’s projections, but these purchases should help to close that gap at least partially. Export sales will be released tomorrow for the week ending March 9th. We won’t see these corn flash sales included in the sales report until next week’s report.
We saw the NOPA Crush Report get released today for February. Despite bullish expectations, crush numbers were only good. Crush fell short of the average estimate but held within the range. It was however still higher than January 2023, and February 2022. Cumulative Sep-Feb crush stands at 1044
mbu, down 7 mbu from last year's pace, with the USDA still looking for a slight YoY increase in crush in 2022/23. Bean oil stocks were on the low end of expectations.
The EIA report was released this morning and showed that commercial crude oil stocks increased 1.6 million barrels to 480.1 million, while ethanol stocks increased 1.1 million barrels to 26.4 million (50-week highs). Ethanol production increased 5 thousand barrels per day to 1,014 thousand. U.S. ethanol production continues at a slightly below average but steady pace, though stocks as of Friday had climbed 6.5% over two weeks to 26.4M barrels - the fifth highest for any week on record. The four-week average of implied U.S. gasoline demand has jumped 13% since late January but remains around 4% below "normal" levels for the date, but very similar to year-ago at this point and well above 2021 levels. The production of ethanol utilized an estimated 101.6 million bushels of corn in the week ending March 10, up from 101.2 million the previous week, but down from 102.1 million bushels in the same week last year. Estimated marketing year to date corn use for ethanol totals 2.703 billion bushels, down 147 million bushels or 5.1% from the previous year's pace, but only about 5 million bushels below the seasonal pace needed to hit USDA's target.
The Black Sea Grain Corridor discussions are in a bit of as stalemate, with Russia only wanting to do a 60 day extension while other parties holding firm to a minimum of a 120 day extension
Funds were thought to have been mixed today with corn and wheat a buyer and beans a seller.
The CFTC report was released yesterday afternoon catching up to Feb 28th. The report showed funds had sold a much larger amount of corn than trade had expected; the week of Feb 21-Feb 28 came it at an all-time record in one-week fund selling.