Trade is mixed this morning as we see final pre-report positioning take place. Very few changes are expected in today’s release, but that does hinge on the stocks data from March and how much of those are incorporated into the supply side. Trade is monitoring the spring blizzard that is shaping up in the Upper Plains, and how it may impact both soil conditions and logistics. We are now hearing concerns over getting spring inputs delivered due to logistic issues, mainly on waterways and rail lines. Trade is showing more concern with the trade relations between the US and EU as tensions rise as the possibility of losing more export business looms. Once today’s data is released trade will return to monitoring these factors for price discovery.
Not much is expected to change in corn balance sheets today. The average carryout estimate is for 1.9 billion bu. The initial planting report on corn came out as expected at 2%. This is equal to last year and the five-year average. Interesting to see the Brazilian crop is already 40% sold. This may leave little business for the US to cover.
Soybeans are trying to post a recovery ahead of today’s data but struggling to do so. Technical resistance and growing crop estimates out of South America are the primary reasons soybeans continue to struggle. Harvest reports out of Argentina are showing record yields which will only increase competition for the US in the global market. ASF continues to spread though Asia, cutting soy demand as it does. This is being verified by a Chinese crush pace that is 7% under a year ago. The average estimate for US carryout today is at 913 million bu. More attention will be on the South American production figures.
Wheat is struggling today as it lacks both fundamental and technical support. The weekly crop rating increased to 60% Good/Excellent which is twice the amount in that category from a year ago. The global wheat crop is all-around better than a year ago, as Ukraine rates its crop 92% Good/Excellent. Russian officials are claiming their crop is “very good” as well. Buyers are passing over US wheat offerings in favor of those out of the Black Sea which is the most negative factor for the complex. A slight increase to US ending stocks is expected today at 1.05 billion bu.
This commentary is the sole opinion of Karl Setzer. This is intended for informational purposes only and not to be used for specific trading recommendations. The information used to generate this commentary is gathered from a variety of sources believed to be accurate. If you have any questions or would like additional market information, feel free to contact Karl Setzer at 800.858.3738, extension 411, or at firstname.lastname@example.org . You can also follow Karl on twitter; @ksetzergrains