Mar 5 Afternoon Ag Commentary

by Steve Freed,

SOYBEANS

Soybeans traded higher.  SK traded near 14.33 and just 12 cents below contract highs. BOK traded over 52 cents. SMK remains in a downtrend and ended near 419.4. Headlines suggested soybean buying due to concern about South America crops. Soyoil following new highs in Argentina and Black Sea sunoil, Argentina soyoil and China soyoil futures. There was even talk that Ukraine bought Argentina soybeans for soyoil as sunoil supplies decline. Soyoil is making new highs as pct of crush. Argentina lowered their soybean crop rating. USDA though is not expected to make big changes to South America soybean crops or US 20/21 soybean carryout on the March 9 update. Argentina 2 week weather forecast is dry and warm. There is talk that long soybean managed funds will add to position om March 15 when position limits will increase. This due to tightening US balance sheets.

CORN

Corn futures traded higher. CK traded back over the 5.45 moving average and reversed a down trend pattern. Resistance is from 5.50-5.60. CZ made new highs at 4.82. CN-CU spread also reversed its down trend from the high near+66 to yesterday low near +30. Some feel tightening US balance sheet and firm basis levels could push the spread back to recent high. Argentina lowered their corn crops ratings. Crops are entering critical yield determining period with little rain forecasted and temps above normal. Late Brazil planted corn crop could suggest they may not have corn for export until July-Aug. There is some concern that China is slow in importing US corn commit. Most feel they will take the US corn and could import a total of 30 mmt vs USDA 24. China announced stops to rebuild hog herd and forecasted GDP growth near 6 pct. This could help increase their feed import demand. USDA is not expected to make big changes to South America corn crops or US 20/21 soybean carryout on the March 9 update. There is talk that long corn managed funds will add to position on March 15 when position limits will increase. This due to tightening US balance sheets. Higher Crude prices and talk of increase demand for fuel once most Americans get vaccinated could also increase corn demand for fuel. US cattle feeders also concerned about low corn supplies for summer feeding.

WHEAT

Wheat futures traded higher. Wheat followed higher corn prices and higher energy and stocks prices. Some feel there could be additional buying on concerns about inflation. There could also be increase in food demand after most Americans are vaccinated. There is though some concern about increase wheat feeding reducing wheat for milling. WK held support near 6.46. WK traded back over resistance near 6.51 and closed near 6.53. Next resistance is 6.57. WK remains in a 6.40-6.80 range. KWK traded down to 6.17. KWK did manage to close higher and near 6.26. Next resistance s 6.35. KWK tested the lower end of recent range near 6.20. Higher end is near 6.60. Key will be 2021 north hemisphere weather and Russia wheat export policy. US wheat is not competitive to most World buyers. Large inverses between old and new crop EU and Russia export prices and carries in US makes US new crop prices higher vs Russia. USDA is not expected to make big changes on their March 9 US or World wheat supply and demand.

2021-03-05T21:28:17+00:00 March 5th, 2021|