Grains closed lower on Monday:
July Corn – 10 ¼ cents/bu (7.18 ½ )
July Soybeans – 4 ½ cents/bu (16.46 ¾ )
July Chi Wheat – 7 ¼ cents/bu (10.70)
Cdn $ -0.00580 (78.01 cents)
WTI Crude Oil -7.17/barrel (102.16)
Another very volatile grain trading day on Monday, as we saw wide trading ranges for all grains. Corn and beans closed nearer the bottom of their trading ranges while wheat was in the middle of it’s range. The difference between highs and lows for the July grain contracts today were 22 ¾ cents/bu for corn, 29 cents/bu for soybeans, and 75 cents/bu for Chicago wheat.
This morning, the USDA confirmed the following Flash Export Sale:
159,000 tonnes of corn to Mexico for shipment in 2021/22
US export corn basis weakened by a nickel per bushel today, as some of the optimism over rampant export demand wanes slightly. Brazil reported that 91% of it’s safrihna corn crop is planted, while 44% of it’s first corn crop is harvested. Brazil is forecast to get a solid inch of rain over at least 50% of it’s growing regions in the next 5 days, which should put precipitation accumulations at normal for the past 30 days. Argentina announced that it was halting exports of grains and oilseeds temporarily. This briefly got the market fired up, until it was realized that this was a temporary measure that allows the government to increase it’s export taxes before it starts issuing new export permits.
Soybean market traded both sides of unchanged in very quiet volumes. Some concerns over the Chinese economy starting to be whispered about, and of course, any such cracks would adversely impact import demand for soy products. China is reporting higher COVID infection numbers due to the Omicron variant. China’s solution to COVID infections has been widespread shut downs of entire cities, but with the increased transmission rates for these new COVID variants, the effectiveness that China had in curtailing the spread is just not happening now. The result of lockdowns is stifling economic activity. Couple that with concerns over China’s allegiance to Russia and it’s invasion of the Ukraine, and you had some analysts wondering about the potential for a tariff war with the USA. We seem to be a long ways away from that type of action, but it is definitely on some traders radar.
Wheat values swung widely on a variety of world announcements today. US wheat values are trying to break in order to make North American wheat relevant in export circles. Russia confirms that it is exporting wheat to Egypt, and Egypt confirms that it is buying wheat from former Soviet Union countries. Pakistan says it will run out of wheat by April ,with out a resupply from Russia. Iraq and Turkey both tendered for wheat today. A badly translated Russian government announcement suggested that Russia was planning to halt grain exports, while Russia later said that it’s policy has not changed, and it is continuing to load wheat at it’s ports.
This morning, the USDA also released it’s Weekly Export Inspection Report for shipments for the week ended Thursday, March 10th. Today’s data showed that exports of corn and wheat were at the low end of trade expectations, while soybeans were in the middle of the range. Of the 45.1 million bushels of corn exported, 13.2 million went to China, while of the 28.4 million bushels of soybeans loaded, 14.3 million went to China. Corn export shipments last week represented a 5 week low, at a time when corn exports would be expected to be growing. That disappointing shipment number is another reason why corn futures struggled today. Cumulative USA corn exports lag the pace at this time last year by 4.3 million tonnes (169 million bushels).
On the day Monday, funds were believed to have been sellers across the board, liquidating an estimated 10,000 corn contracts (now long 351,000), 5,000 soybean contracts (now long 153,000), and 5,000 Chicago wheat contracts (now short 21,000).