Grain Market Chatter Closing Comments 03/09/2015

Craig’s Closing Comments

March 9, 2015

Corn:

The corn market spent the session consolidating ahead of tomorrow’s USDA Supply & Demand report.  Heading into that report the average trade guess is that USA corn ending stocks will end up at 1.826 billion bushels nearly unchanged from the 1.827 number that we were presented with in the February report.  It is expected that world ending stocks will be 189.67 MMT up slightly from the 189.64 MMT of the February report.  In evaluating South America the traders think we will see Brazilian corn production pegged at 74.62 MMT and Argentinian corn production at 23.54 MMT.

We did have the weekly USDA export inspections report today which showed a weekly total of 46.5 million bushels inspected for export last week. This is above the 33.8 million bushels needed weekly to hit the USDA projection for the year.

At the current time two of my three technical indicators are bullish although at the end of the day we are stuck in a sideways choppy trading range. 

Soybean:

Beans had a more interesting story than did corn today.  We started out with the weekly export inspections report which showed inspections of 23 million bushels, much stronger than the 8.9 million bushels we need to average to achieve the USDA annual projection.  China has been the major customer and the good news is that should continue to be the case with USDA's Ag Attaché in China estimating that China will import 73 MMT of soybeans in 2014/15 and 77.5 MMT of soybeans in 2015/16. If he turns out to be correct this would be a new record two years running.

Of course South America is going to get a piece of that action and oddly enough that may have been one of the factors supporting the bean market today.  The Brazilian real is trading at its lowest level in over 10 years which in turn has resulted heavy farmer selling of soybeans in Brazil.  With harvest underway and strong farmer selling the export business has shifted to South America.  In fact, as of Friday there were 82 ships in Brazilian ports waiting to load soybeans.  Today, the rumor sweeping across the trade was that the Brazilian trucker strike may start back up if tomorrow’s meetings with government officials aren’t successful.  If true that could push a little more business our way and of course that was in pact what helped us post a higher close for the session.

Heading into the report tomorrow the average trade estimate is that they will place USA soybean ending stocks at 376 million bushels down a touch from the 385 posted in February.  The average trade guess is that global ending stocks will come in at 89.47 MMT compared to 89.26 in February.  They expect Brazilian soybean production to be 94.01 MMT and Argentinian soybean production at 56.88 MMT.

In spite of today’s higher close all three of my technical indicators are still bearish both the old crop and new crop futures. 

Wheat:

While export inspections were better than needed to achieve the USDA projection in corn and beans that was not the case with wheat.  Weekly export inspections came in at 13.8 million bushels. This was a pretty big swing and a miss from the 19.2 million bushels we need to average weekly to achieve the USDA’s current projections.

There is a persistent rumor making the rounds that Brazil will buy 2 or 3 cargoes of USA new crop HRW, but I have heard that for several days now but have not been able to confirm it.

Heading into tomorrow’s USDA S&D report the average trade guess is that USA wheat ending stocks will come in at 699 million bushels up from 692 in February.  On the global front the trade is looking for very little change with global ending stocks projected at 197.69 MMT compared to 197.85 MMT in February.

At the present time two of my three technical indicators are bullish both the Minneapolis and Kansas City May futures.