Brooks Schaffer Market Report for Friday March 15

This is the Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.

Corn and soybean markets are working hard to gain some ground. Even with some bearish news to digest corn and beans are showing decent strength. It was worth noting that as of the last commitment of traders report, the funds had not closed out their short positions nearly as much as many had anticipated, meaning we are getting other buyers coming into these markets to give us the strength, not the funds bailing. They are still defending their short positions so far but that could change anytime. News flow has been light this week but CONAB, the Brazilian equivalent of USDA, did give us their updated production estimates this week. They projected their soybean crop at 146.8 million metric tons and corn at 112.7 mmt. That is 8.2 mmt of soybeans below USDA and 11.3 mmt of corn. We talk in bushels in the US so for ease of comparison, 8.2 million metric tons is just over 301 million bushels of soybeans. 11.3 mmt is 444 million bushels of corn. That is how far apart we are on estimates. That is almost as much as the entire projected carryout of soybeans in the US. That is how much uncertainty there still is in the crop size in South America right now. April weather makes the second crop corn in Brazil so the corn number also has a lot of room to move. Beans found a lot of strength after the CONAB number release on Wednesday. Beans also got some strength from some private analysts acreage numbers released this week as well that came out lower than expected. Selling pressure came Thursday from better rain forecasts for both Brazil and Argentina. Although exports were respectable for corn this week, bean exports continue to lag which added to the selling pressure and we saw more wheat cancellations by China. Ethanol grind was disappointing too that we got on Wednesday which came out just below expectations and down quite a bit from last week as margins have come under pressure recently. Ethanol stocks have not dropped as much as we had hoped either but gasoline demand continues to rebound which gives us hope going forward to pull stocks down. The recent strength in crude oil should help ethanol margins but increasing prices will not help demand for gasoline. 

We get NOPA crush report today which is expected to show another month of record soybean crush. The market will be closely watching what soybean oil stocks have done and the bulls need to see them not building too much or there will be more selling pressure. Brazilian weather still matters and we are starting to watch US weather closer as spring approaches. March 28th will be a big day when we get USDA’s prospective planting and quarterly stocks report. This report has a history of being a market mover. If you need to raise cash soon, I would be a seller of corn and beans on this rally. Work good till canceled orders to scale in sales. Beans traded to a high of 12.17 but then sold off and closed below 12 on Thursday. You cannot call and price when the market is at the high of the day.