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Today’s Prices
Grain prices lowered across the board today on profit taking, some profit taking likely given the fact that next week is month end and quarter end. But also profit taking ahead of the USDA stocks and acreage reports next week on March 31st.
Grain Market News
Corn Weekly Export Sales
The Lack of Ukrainian supplies should result in some better US exports.
Today’s corn export sale was not overly impressive at 980 thousand tons, which Is still a good number, but it is down from the previous two weeks. This is still over double the level needed to reach the USDA forecast.
Soybean Weekly Export Sales
Soybean export sales also down sharply from last week, in fact the second lowest of the marketing year. Only one week around January 1st was lower than the sales we seen this week.
We are not expecting export sales to remain in the 1-2mmt on a significant basis, but we should see export sales consistently running above or at the level needed to reach the USDA forecast.
We do believe that US export sales will be far above the current projections, but todays numbers were fairly disappointing.
Wheat Weekly Export Sales
Wheat was also disappointing, up fractionally form last week, but still well below the level needed.
Today’s sales came in at 156mmt, that’s only about half the level needed to reach the USDA forecast.
We will point out that wheat sales have varied from week to week, a handful of weeks with very good sales and a handful of weeks with very disappointing sales.
Bottom line is we are running fairly close to USDA target, but if this disappointing pace continues then we may fall short. Export sales for corn, beans, and wheat were mostly disappointing and that may have contributed to today’s sale off.
Grain Market News
10-Day South American Precipitation Forecast
Here is a map of the South American precipitation forecast over the next 10 days.
Although Brazil is wrapping up its soybean harvest, suprema corn crop is expected to see very good rain. 2-4 inches of rain is expected to fall over the next 10 days over the vast majority of Brazil’s suprema corn region.
That should get that crop off to a very good start especially when you consider that it was not only planted quicker than last year but planted ahead of the average pace.
Brazilian suprema corn, which accounts for 75% of Brazil’s corn production, is off to a very good start.
Temperature Anomaly
In addition to rainfall, temperatures for the suprema corn crop are generally at or slightly below normal. So, we do not see any significant stress to the Brazilian suprema corn crop at this time.
10-Day U.S. Precipitation Forecast
The US weather isn’t perfect, but it has improved.
Over the past week we have seen some rain out in the plain form 1–2-inch rainfall was reported.
Our 10-day precipitation forecast shows 1-2 and even 2-3 inches of rain in a good portion of the western corn belt, in fact some of the driest areas from northeast Nebraska, northeast Iowa, and extending into adjacent areas of Minnesota and North Dakota.
If this forecast verifies that would be a very nice improvement in the soil moisture in the western belt and even into the plains.
One area that remains a concern is areas from the northern Delta into the eastern belt, Ohio valley even in the southern Great Lakes where an additional 2-3 inches of rain could fall in an area that is already saturated.
Calculated Soil Moisture Anomaly
When we look at our soil moisture, which compares moisture as of March 23rd to normal, you can see that wet area from the northern Delta through the Ohio valley, eastern belt, and into the southern lakes.
This is an area that has been and continues to be quite wet and an area that needs to be monitored going forward for potential planting delays.
Brazilian Ethanol Premium to US Gulf
The zero line is where Brazilian ethanol is equal to US ethanol, when the number is below 0 that means Brazilian ethanol is cheaper and when it’s above the 0-line Brazilian ethanol is above the US.
We’ve seen our ethanol stocks growing recently, that’s likely due to the fact that Brazilian ethanol through late February and into late March has been very cheap. This is likely taking away from some of the U.S. exports of ethanol.
Recently Brazilian ethanol has gone from being 30 cents cheaper than the US to now 10 cents higher priced than the US, that should contribute to better US ethanol exports and a lowering of US ethanol stock over the next 2-3 months.
March Corn Chart
Corn prices yesterday were posting prices close to the contract highs at 7.47 but we pulled back yesterday off the highs and now today we were lower.
Todays close at 7.28 is about 20 cents below current overhead resistance with chart support likely coming in around the upper $6 to lower $7 range.
Yesterday’s pull back from the highs and todays plow to the downside does give the charts a little bit of a hint of a potential downtrend, although keep in mind the overall trend is still pointed upward.
Additional profit taking over the next week could push corn prices a little lower in the days to come, we are not bearish in the long term but a further correction to the downside cannot be ruled out.
March Soybean Chart
Soybean prices also posting a high yesterday at 17.13 getting close to the upper end of the range. Todays close at 16.82 is 30 cents below yesterday’s high and 60 cents below the overhead resistance with chart support likely coming in around the 16.25 area.
That is where we’ve had multiple lows over the last 2-3 weeks and where our uptrend line comes into play.
Todays close is close to the middle of that range that we have established on the chart.
March KC Wheat Chart
Wheat prices are also showing some signs of wanting to turn lower in the short term, although the longer-term trend is still pointed upward.
The short term turn in the chart may be the desire for long position traders to be taking some profit and could allow this wheat market to slip lower with the next area of major chart support a double bottom around 10.27.
If we did push that level it could push the technical down in to the oversold range and that would likely become a buying area somewhere in the lower $10 range.
Questions or Comments
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