Corn: The combination of a continuation of a positive stock market and supportive crude oil prices were enough to keep an appearance of legs under corn futures. Fundamentally, the trade is keeping a relatively close watch on the new crop corn-soybean ratio, discussion of soggy wet fields which need to dry and warm before serious consideration can begin with regards to planting and new discussion of the potential problem brewing of poor seed corn quality. Working for corn is Monday news of funds buying 5,000 contracts of corn on the day. Working against the corn on Monday were less than enthusiastic weekly corn inspections. Signs of a major rally in corn may brew talk of forces working against end users in the ethanol, livestock/poultry and export sector.
Soybeans: a bearish acreage outlook for soybean on Friday was in dire need of a subtle corrective confidence boost on Monday. Little more than two weeks from today USDA is scheduled to release its “Prospective Plantings” report on March 31st, thus let the talk of acreage wars begin. On Monday, it is estimated funds bought 5,000 contracts of beans in light of poor weekly export inspections. On a positive note was the National Oilseed Processors Association’s surprise of a better than expected month of February soybean crush. Use caution with its results as poor operating crusher margins and less than inspiring soybean oil and soymeal demand is evident while soybean exports continue to shoulder the bullish old crop demand.
Wheat: Despite pre opening news of Syria’s purchase of 200 K tonnes of Russia wheat, the trade is enamored with a strong DJIA and weak US dollar performance. Rains in the southern Plains favored the east region of the hard red winter wheat belt and not the key center-west regions of KS, OK and TX. Funds on the day were buyers of an estimated 4,000 contracts of wheat, but still hold a massive 41,000 contract short position. Keep your eye on the northern Plains spring wheat region as forecasters continue to discuss the potential for a cold wet spring which could hamper plantings. Cumulative fair, poor and very poor wheat conditions improved 2% for Texas, up 4% for Oklahoma and decreased 3% for number one winter wheat producing state of Kansas. Similar to corn and soybeans, wheat is likely to take its direction from the DJIA, crude oil and dollar index
Joe Victor is the Vice President at Allendale, Inc. in McHenry, IL. Allendale is registered with the CFTC and NFA and is a member of the NIBA. www.allendale-inc.com
