Grains are high to close:
Corn + 2 1/4 cent/bu (May @ 5.51 1/4)
Soybeans + 5 3/4 cents/bu (May @ 14.23 1/4)
Chi Wheat +7 1/2 cents/bu (May @ 6.34 3/4)
Cdn $ -0.00390 (79.565 cents)
WTI Crude Oil -3.80/barrel (57.76) ßAnother big drop in stock confidence today
A fairly quiet day in the news allowed the grain market to climb, closing positive, but off of their highs.
As private analysts start to release their planting intentions ahead of next week’s USDA report, traders are becoming aware that the U.S. may need to plant more soybean acres. ProFarmer tagged estimates for corn acreage at 93.4 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. Soybean acerage of less that 90 million, even with good yields, will still not bring soybean carryouts back to comfortable levels. Soybean futures will have to rally a fair amount to draw acres back from corn. It will be interesting to see what the USDA pegs these acre intentions at on the 31st. (bullish soybeans and corn) ß This seems to be the story that most of the trade fixated on today.
Higher soyoil prices are supporting the soybeans today. The supply of vegetable oil continues to tighten, increasing soyoil to higher demand. (bullish soybeans) – That being said, there is an old saying that oil-led rallies do not have staying power. The soyoil market will be closely watched by traders to see any signs of hesitation or fall back.
Brazil weather is starting to improve, providing a window for their soybean harvest to continue. It is estimated that the country is now 60% complete, and the ports are jam packed with freighters lining up to load up and ship to China. (bearish soybeans)
The only positive of this story is that soybean harvest was so late, that it is now infringing on sugar season. Now both soybeans and sugar and fighting for port spots, which could cause delays in shipping. If importers are looking for a quick delivery, the USA might be a option. (Slightly bullish).
Wheat in the U.S. is continuing to improve with many states increasing their good-to-excellent percentages. Kansas was at 45% (38% last week), Oklahoma 62% (57%), Texas 29% (27%), Colorado 33% (25%), and Arkansas 57% (53%). They say rain makes grain, and improved potential yields are definitely developing in the USA. (bearish wheat)
Wheat futures are being supported by the question marks and uncertainty around Russia’s wheat and the export policy they will be following come harvest. (bullish wheat)
Funds are expected to have been buyers with corn projected to have bought 2,000 contracts (long 353,000), soybeans to have bought 4,000 contracts (long 146,000), and wheat to have bought 5,000 contracts (long 2,000).