This is the Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
March corn broke through the $4 level on Friday. This was the first time we have been below $4 since 2020. Soybeans also traded to levels not seen since 2020. There is not much new fundamental news and the market cannot shake the bears. Brazil’s soybean harvest and corn planting are progressing at a rapid pace. There are three more Brazilian soybean vessels booked to the US east coast. Argentine weather seems to have stabilized. It matters very little right now that analysts continue to lower the Brazilian soybean crop estimates. The export sales report was delayed by the President’s Day holiday and was released Friday morning. The disappointing numbers helped fuel the selling. Corn was at the bottom of expectations and a 6 week low. Soybean sales were sharply lower than expected and a marketing year low and wheat sales were lower than expectations at a 6 week low. The market has been disappointed to not see China come in to buy US corn or beans after returning from their New Year’s celebration. Friday’s commitment of traders report that showed the funds have built an all time record short in corn and a massive short in beans and wheat. The two week weather forecast calling for warm and wet conditions for much of the country is probably also being read by the market as a bearish force as it will allow early fieldwork.
Monday’s close was a little more encouraging as we saw key reversals in corn, beans and wheat. The million dollar question is where the bottom is and the only thing we can say for certain is that we are a lot closer to it than we were three weeks ago. If the low from Monday holds, we should have good support but we will not know that until it is further behind us. Export inspections came out on Monday and were much more encouraging than the inspections from Friday. We are approaching first notice day for March grain contracts which is coming up on Thursday. Thursday will also be the last day of what has been a truly miserable month in the market and may end some of the selling pressure related to farmers raising cash for land and equipment payments. This is known to market analysts as the “John Deere low.”
We get USDA’s March supply and demand update next Friday March 8th. Next big reports coming up are Prospective Plantings and Quarterly Stocks on March 28th. We expect USDA to increase corn demand for ethanol and hopefully feed as well. We should also see USDA trim Brazilian estimates to bring them closer to almost all other analysts.