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March 22nd- Closing Market Commentary

03/22/2021
March 22nd- Closing Market Commentary

Grains are mixed to close:

Corn – 8 3/4 cents/bu (May @ 5.49)

Soybeans +1 ¼ cent/bu (May @ 14.17 1/2)

Chi Wheat + ¼ cents/bu (May @ 6.27 1/4)

Cdn $ -0.00085 (79.955 cents)

WTI Crude Oil +0.13/barrel (61.55)

Smells like spring outside!

This morning, the USDA released it’s Weekly Export Inspections Report for the week ending March 18th. Exports were positive across the board with wheat above expectations, and corn and soybeans on the high end of expectations. At least 6 corn cargoes were headed to China, but for the first time in a while, no soybeans were. Instead, Egypt was the premium buyer of soybeans. Wheat exports to date exceed the seasonal pace needed to hit USDA’s target by 29 million bushels (22 million Last week), soybeans exceed by 296 million bushels (309 million last week), and corn exceeds by 81 million bushels (55 million last week). To hit the USDA’s targets, soybeans only need to average 8.6 million bushels per week, and corn only needs to average 54.2 million bushels per week.

In Million Bu.

Actual

Estimates

Last Week

10-Week Average

Corn

77.2

63-86.6

89.5

58.8

Soybeans

18.0

11-22

20.2

51.5

Wheat

23.8

11.9-21.1

26.2

15.8

In the graph I attached below, you can see that corn exports are a record high for weekly corn export inspections (topping the 1989 record shown in brown by 0.9 million bushels). The red circle indicates the previous March export record (2016/17), and you can clearly see that we are well ahead of that. HUGE volumes of corn are being shipped right now.

Unlike the corn sales on corn sales occurring last week, Monday was quiet of any flashes.

Despite an impressive week on exports, grains continue to react with a mind of their own pushing lower. South American weather conditions are turning more favourable, resulting in decreases in futures, specifically in corn and new crop soybeans.

It is estimated that Mato Grosso, Brazil is now 97.6% finished corn planting (99.5% Last year). Their soybean harvest is also estimated at 91.7% complete (98.3% last year).

A contrasting relationship between soybean oil and soybean meal was shown today with soybean oil closing locked limit up (+28 cents), while soymeal closed down approximately 26.5 cents/bu. These factors mostly offset the value of soybeans, allowing a small gain in close soybean futures.

Beneficial rains across big wheat producing areas are forecast, providing some resistance to wheat futures.

Private acreage estimates are staring to filter in with ProFarmer and Markit releasing their surveys. ProFarmer tagged estimates for corn acreage at93.4 million, and soybean at 88.9 million. Markit (formerly Informa) was projecting acres for corn at 94.3 million, and soybean acres at 89.7 million/

Funds are expected to be mixed with corn projected to have sold 15,000 contracts (long 351,000), and soybeans and wheat are estimated to be unchanged (long 142,000 and short 3,000 respectively).

Longer term, the USDA will release it’s Quarterly Stocks Report and it’s 2021 Prospective Planting Report on March 31st 2 noon ET.  Those big reports will give the market a lot of direction going forward at that time. It seems that even a week ahead, traders are already focusing their attention on the data expected to come out of this report. We’ve traded nearly sideways since the March USDA report, so it is expected that this report will be highly volatile either positive or negative. 

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