This is the Market Report with Brooks Schaffer of Palmetto Grain. Reach him at brooks@palmettograin.com or 843-540-4540.
Grain markets started the week off with Monday’s trade ending seeing wheat up double digits, corn close to unchanged and beans down around 10 cents. Soybeans started the session stronger with follow through buying from Friday’s NOPA domestic crush report for the month of February. Bean exports have been well behind pace so we really need to see domestic crush remain very strong and Friday’s report showed February crush broke the record for Feb by a huge margin and was well above expectations. This news by itself would have been very bullish but some of the optimism was offset by a continued building of soybean oil stocks. Export inspections were disappointing Monday but the selling pressure came mid session when we got updated weather model runs showing precipitation estimates increasing for much of Brazil and Argentina. We are still very much in a weather market in South America and starting to watch US weather more closely. The increasing precip also put pressure on corn which was trading a few cents higher pulled by strength in wheat on monday. Weather model runs were increasing coverage and totals for much of the US Midwest as well. There are still a lot of US production areas in varying degrees of drought and have very little subsoil reserves of moisture. Wheat found buying interest after we saw an uptick in the Russian wheat prices offered. Until now it has been a race to the bottom as Russia keeps exporting as much as they can at ever decreasing prices.
Friday we also got an updated commitment of traders report showing funds bought back 33,000 of their short positions last week. That was significantly more than the 10,000 the trade had expected. They also bought back 13,700 contracts of soybeans.
Markets are going to continue to watch weather in both South America and increasingly in the US as well. Mostly we will be waiting for the numbers from USDA’s Prospective Planting and Quarterly stocks report that comes out March 28th at noon. This has the potential to be a big market mover from a surprise on either stocks or acreage or both. Early next week we will start seeing estimates of what the market is expecting to see on the USDA report.