Grains closed mixed:
Corn -2 ¾ cents/bu (May @ 5.32 1/4)
Soybeans + 3 cents/bu (May @ 14.10)
Chi Wheat -5 cents/bu (May @ 6.51)
Currently:
Cdn $ -0.00150 (78.99 cents)
WTI Crude Oil +2.87/barrel (64.15)
Grains fell from midday highs to close as Federal Chair Powell made some remarks worrying traders about uncontrolled inflation. This resulted in risk-off selling, which eroded the grain prices. (Soybeans were up 30+ cents at midday)
The USDA released their export sales report this morning for the week ending February 25th. Corn exports came in well under expectations, while soybeans and wheat were within estimates. Considering sub-par export sales, grain markets are performing surprisingly well. Soybeans are leading the commodities higher, as decent export sales prove as yet another reminder that we have yet to ration the limited supply of soybeans.
China was the featured buyer of U.S. corn at 41.5 million bushels (41.2 million of that was a switch from “unknown”. 12.9 million bushels of “unknown” (China??) bought soybeans were cancelled and shifted to other customers. Marketing year wheat export sales exceed the pace needed to hit USDA’s target by 12 million bushels, versus 20 million last week. Actual shipments are only ahead of pace by 8 million bushels. Marketing year export sales for corn exceed the USDA’s pace by 460 million bushels (503 million last week), but their actual shipments are lagging by 21 million bushels. Soybean export sales are also exceeding the seasonal pace at 234 million bushels (259 million last week), and their actual shipments are exceeding the pace by 337 million bushels.
| | Actuals | Estimates | Last Week | Last Year |
| 2020/21 Corn 2021/22 Corn | 115.9 38.8 | 400-800 50-250 | 453.3 145.9 | 769.2 100.0 |
| 2020/21 Soybeans 2021/22 Soybeans | 334.0 199.4 | 100-500 0-300 | 167.9 70.8 | 345.0 1.4 |
| 2020/21 Wheat 2021/22 Wheat | 219.2 23.5 | 100-500 0-100 | 167.7 14.8 | 542.4 28.0 |
Tuesday’s USDA report for supply and demand is the main attraction for traders, and is already starting to play into buying and selling decisions. The report is expected to show a continued tightening of soybean stocks, but what happens to corn is up in the air (look at the size of the estimate trade range!). Estimates are as follows:
NH3 and UAN prices continue to skyrocket (up $100+ in the last 48 hours). The question of whether farmers will switch from corn acres is yet to be determined as planting intentions are not surveyed until the end of March.
Soybean oil continues to drive the soybean prices higher as world vegetable stocks get tighter. Soybean crush margins are very favorable, so it does not look like the plants will be slowing down anytime soon. With soybean stocks already tight, a strong demand from crushers will only exasperate the lack of soybeans, and potentially push soybeans higher ].
Confirmed cases of ASF have been announced in China. This strand seems to be less lethal, but harder to test for, and just as contagious. Pork imports are on the rise, while feed demand is slowing. Will be an interesting and important story to watch and see it progress.
Argentine soybeans dropped in good to excellence ratings to 10% from 15% last week. Corn also dropped with it falling 5% to 25%.
OPEC met today and decided to keep oil output unchanged. Most traders had predicted that there would be a small production increase, so the lack of change caused crude oil prices to jump higher.
Funds are expected to be mostly sellers with both corn and wheat expected to have sold 5,000 contracts (long 320,000 and 10,000 respectively). Soybeans are anticipated to have bought 3,000 contracts (long 154,000).