Grains are modestly higher in overnight trading:
Corn + ¾ cent/bu (May @ 5.40)
Soybeans +9 ¼ cents/bu (May @ 13.76 )
Chi Wheat + 2 cents/bu (May @ 6.03 ¾ )
Cdn $ +0.00210 (79.38 cents)
WTI Crude Oil unchanged (60.55/barrel)
Grains are enjoying a small bounce higher in the evening session, which is not saying a lot, given the big losses suffered yesterday. Today, all eyes will be on the USDA for the release of their noon ET Quarterly Stocks Report (as of March 1st) and their 2021 Prospective Planting Report. The trade is anticipating the tightest corn and soybean stocks in the past 6 years, which should not be a surprise, given the tremendous export demand we have seen, and the very good domestic demand as well. The USDA is well known for surprises in this report, and any stock deviations (higher or lower) from trade expectations could have an explosive impact on old crop grain values. The Prospective Planting Report is also another market maker, as the anticipated tight USA grain stocks make large acreages of corn and soybeans in particular imperative. The big question is, given the high grain prices we have seen this winter/spring, how big can the acreages actually get?
Below is a recap of trade expectations for today’s USDA reports (from our friends at StoneX):
Following the release of the stock/acreage numbers today, the market focus will quickly return to USA weather for direction. Yesterday saw good rains fall in the Ohio River Valley while the rest Midwest and USA Plains were mainly dry. Weather maps do suggest some rainfall activity for the dry northern Plains next week, with that moisture spreading south and eastward into extended forecasts. Argentina and Brazil were mainly dry yesterday, but Argentina does look to get some heavier type rains in it’s 5 to 10 day forecast, while Brazil looks to be drying out – which his a concern for it’s late planted safrinha corn crop.
Wheat values have come under significant pressure over the past few trading sessions, as weakness in corn and beans has not helped! But worldwide wheat values have slumped as conditions improve particularly in the Black Sea and Australian production zones. In the USA, rains across the Plains have improved wheat condition ratings dramatically, and allayed a lot of the fears from February that extremely cold temperatures were going to cause excessive winterkill. While we don’t yet have USDA national wheat condition ratings, yesterday, we saw the good/excellent ratings for Kansas improve 5% to 50% for the week, while Illinois shot up an amazing 24% to 70% good/excellent. The northern Plains in the USA continue to be dry, so their wheat ratings have not improved, but overall, there is optimism over better wheat production potential Stateside.