Written Commentary
SOYBEANS
Soybeans and soyoil traded sharply lower and are back near key support. Washout was linked to weak technical signals, concern about bearish USDA report, slowdown in China buying and improved US and Argentina weather. There was some end user buying near session lows. US Dollar was higher. Crude was lower. There was concern that USDA may “find” bushels on the March 31 report. Average guess is for March 1 stocks near 1,534 mil bu with a range of 1,440-1,825. A number above 1,575 would suggest last years crop could have been bigger. SK is near what some thought was key long term support near 13.50. SX is now below 12.00. BOK dropped below 51 cents on lower China vegoil and lower palmoil prices. Lower palmoil due to seasonal increase in production and lowed China and India demand. Talk of US 2020/21 carryout below 100 could still support prices.
CORN
Corn futures dropped on continued fund long liquidation. Improving US Midwest and Argentina weather offset drier Brazil weather. There was concern that USDA may “find” bushels on the March 31 report. Average guess is for March 1 stocks near 7,767 mil bu with a range of 7,573-7,980. A number above 7,800 would suggest USDA may not have counted all bushels in transit vs their lower than expected estimate of Dec 1 corn stocks. CK traded below initial support near 5.40. CZ is now near 4.50. NASS reported US corn planting progress for selected states; LA (74 vs 64 avg) and Texas (50 vs 46 avg). MS is planting at average pace at 24 and AR is at only 4 planted vs 13 ave. Weekly EIA ethanol production is expected to show a modest increase from last week, with a small draw in ethanol stocks expected from last week. There is also concern that USDA could estimate US corn acres near last years March initial guess of 97.0 mil acres. Average trade guess is 93.2 mil with a range of 92.0 versus 94.5. Most analyst suggest end user add to coverage during this washout in case US summer weather is less than prefect. Most still estimate US 2020/21 corn carryout closer to 1,100 than USDA 1,502.
WHEAT
Wheat futures continued the lower trend since Feb highs. Improved US winter wheat weather and crop outlook, lower World wheat prices and drop in World wheat demand has triggered fund long liquidation and prices trying to find a level that will encourage new demand. US SRW ratings showed general improvement in ratings; AR (59 G/E vs 57 last week), LA (52 vs 45), MS (59 vs 49), IL (70 vs 46 last month), KY (90 vs 72). HRW declined in CO (28 vs 33 last week), OK (61 vs 62), TX (28 vs 29) and SD (31 vs 41). The only HRW states to improve were KS (50 vs 45 last week) and NE (38 vs 34 last month). Trade est US March 1 wheat stocks near 1,272 mil bu vs 1,415 last year and 2021 all wheat acres near 45.0 versus 44.3 last year.
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