Grains Are Lower Post USDA Report

MORNING OUTLOOK

Grains are lower. SK is down 12 cents and near 14.28. SMK is near 413.1. BOK is near 53.40. CK is down 8 cents and near 5.37. WK is down 8 cents and near 6.48. KWK is down 9 cents and near 6.16. US stocks are higher. US Dollar is higher. Crude is lower. Gold is lower.

Grains may be selling the fact that USDA decided not to lower South America corn and soybean crops and raise US corn and soybean exports and lower carryouts. Some feel lower overnight trade also hints of a slowdown in demand for US exports and better US Midwest and Argentina weather.

Chinese Ag futures (May) settled down 15 yuan in soybeans, down 38 in Corn, down 57 in Soymeal, down 76 in Soyoil, and down 84 in Palm Oil. Malaysian palm oil prices were up 60 ringgit at 3,975 (basis May), a 13 year high, over concerns of labor shortages, India imports.

In Argentina, dryness is still an issue; though, some erratic shower and thunderstorm activity is still expected to increase later this week and especially in the first half of next week. Last evening’s GFS model run was drier in Argentina Mar. 19 – 21. In Brazil, conditions in the north will still be wetter than preferred . Net drying will occur in the south into next Tuesday which will benefit fieldwork progress.

Some feel lower Brazil soybean export prices could suggest a bigger crop and potential imports to US. Still poor logistics and late harvest is adding to load out woes. Current prices suggest cost of importing Brazil soybean to US is near +120SN. Private analyst est US soybean carryout near 40-100 mil bu vs USDA 120. Difference is higher exports. This appears to be no time to short soybean futures.

Private analyst est US corn carryout near 1,050-1,125 mil bu vs USDA 1,502. Difference is higher exports. Trade also est US 2021 corn crop near 15,150 mil bu and carryout near 1,000. This suggest a need for higher acres and perfect spring and summer weather. This appears to be no time to short soybean futures.

Wheat is wheat. Fact USDA failed to lower EU or Russia exports is weighing on wheat futures. Matif and Black Sea futures lower on the lack of USDA changes. US Midwest weather looks wetter. Which for now is negative futures. USDA did raise China feed use 5 mmt but failed to increase US. USDA dropped US HRW exports 20 mil bu and raised White same.

On Tuesday, the player sheet had funds net buyers of 6,000 contracts of SRW Wheat; sold 7,000 Corn; bought 4,000 Soybeans; bought 1,000 lots of Soymeal, and; net bought 6,000 Soyoil. We estimate Managed Money net long 25,000 contracts of SRW Wheat; long 353,000 Corn; net long 174,000 Soybeans; net long 61,000 lots of Soymeal, and; long 129,000 Soyoil.