By Steve Freed | ADM Investor Services, Inc.
USDA report day. Month end. Soybeans, soyoil and wheat are higher. Corn is mixed. Soymeal is lower. US stocks are lower. Meats are up. US Dollar is higher. Crude is higher. Gold is lower.
Soybean futures are marginally higher led by new crop November. Soyoil is gaining on soymeal. USDA estimate of US soybean acres was bullish. USDA estimated US 2020 planted soybean acres near 83.5 million versus 85.0 expected and 76.1 last year. While being above last year the estimate was below the average trade guess and could suggest a 2020 US crop 50-100 mil bu below early market estimates. Some feel there could be a 1 million acres switch from corn to soybeans due to recent drop in corn prices. USDA estimated US March 1 soybean stocks at 2,250 mil bu vs 2,241 expected and 2,727 last year. Brazil soybean harvest is near 76 pct done. Brazil farmers have sold a record amount of the crop to date. Brazil has also expected a record 31.5 mmt of soybeans to date and up 38 pct over last year. Some could see SK support near 8.68 and first resistance near 8.97. May soymeal is near support at 321. Resistance is near 343.
USDA estimate of US 2020 corn planted acres was bearish. USDA estimated the acres near a record 97.0 million versus 94.3 expected and 89.7 last year. While some feel 1 million acres of corn could be switched to soybean due to recent drop in corn prices those acres could add 200-300 mil bu to the markets expected 2020 crop before the USDA numbers. USDA also estimated US March 1 corn stocks at 7,950 mil bu versus 8,125 expected and 8.613 last year. Q2 feed/residual is estimated at 1,379 mil bu or 186 mil bu above last year. Some still feel that the lower stocks estimate may be due to fact US 2019 crop may be smaller that USDA guess. Still the lower stocks cannot offset the expected drop in ethanol demand. US farmer has been a good seller of corn of late. Brazil 2nd corn crop planting is done. Weather is dry and the crop could use some rains. Drop in their ethanol demand would more than offset a lower crop. Some feel a trade below 3.43 May corn could send prices down to near 3.29.
Wheat futures traded higher. Some feel that dry weather in Russia and some wheat export restriction in the Black Sea could help wheat futures. Talk that Large wheat importers might increase wheat buying t add to strategic reserves could also help prices. Ongoing increase in US domestic flour demand could also support prices. US food companies are reporting 30-57 pct increase in 4 week demand ending March 22. USDA estimated US 2020 all wheat acres near 44.7 million versus 45.0 expected and 45.1 last year. This week USDA increased crop ratings of most US winter wheat acres. Key now is global north hemisphere weather USDA estimated SU March 1 wheat acres near 1,410 mil bu versus 1,593 last year. Some feel May Chicago wheat support is near 5.52. First resistance is near 5.90 then 6.28.
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