Corn, soybeans, wheat watch international trade, weather

Grain & Soybean Report

Wheat Wheat

Corn: Old crop corn had no problem following through with Friday's surprising stocks number. When looking back at last year, old crop corn has a similar outlook as March of last year. On the 2012 crop report, corn stocks remained the same when trade thought it would rise. Of course, that is exactly what happened last Friday.

Last year, the old crop corn was able to bounce to what would now be equivalent to 740 May corn. For this reason we do not want to underestimate the potential old crop bounce this time around. As with last year, however, we want to use this potential bounce as a selling opportunity.

Rains over the weekend did hit many areas but missed most of the key areas of Nebraska and South Dakota. This likely caused the new crop to offer at least one day of following old crop higher. New crop will continue to follow if the May makes a run for 740 but it would be expected to follow much slower than what it did Monday.

Before getting too excited on a sizable old crop bounce, the May will need to break first resistance, which it stopped at on Monday. That resistance is 716 1/2. Next chart resistance would be 747 1/2. December has next resistance at 558 3/4 and then 568. Those are some levels to look out for on any potential short-term bounce.

This week, the forecast calls for a generally quiet string of six days. After that, NOAA has a forecast for above average rainfall from days 6 to 14 for almost all areas north of Oklahoma. For now, corn bounces still appear to be sales. The question is if the May corn can reach all the way up to the near 650 resistance...Ryan Ettner
Soybeans: With the March supply/demand report out of the way and the Quarterly Grain Stocks and Acreage reports three weeks out, there wasn’t much new information for the market to digest Monday.

Logistics delays at the ports of Brazil are still being talked about but without any confirmation of Chinese demand, this story seems to have run it course for now. The port workers in Brazil are still calling for a strike on March 19. They says if their demands are not met after this 24-hour strike, then their next strike will be indefinitely long. An indefinite strike would likely shift more old crop demand to the United States. If this happens, it could be what the bulls need to push the market the next leg higher.

Soybean inspections Monday came in at a disappointing 17.14 million bushels. Last week the U.S. shipped out 40.336 million bushels. World oil reported today the U.S. and South American September -- February exports were down 2.2 mmt from last year which is at a three year low.

In South American weather, Argentina saw 0.25 to 0.75 inch rainfall this weekend but will see no rain the rest of this week or weekend. Southern Brazil gained 1 to 3 inches from its forecast for 1 to 2 inches over the weekend. An additional 1 to 2 inches may fall over the next three days. Central/Northern Brazil will see slighter below normal rainfall this week. This may keep harvest at a good clip for Brazil. A good chunk of the U.S. saw some good moisture over the weekend as the lingering effects of the 2012 drought continues shrink …Jim McCormick
Wheat: Wheat finished mixed to higher Monday as feed grains rallied. Export inspections for wheat were friendly for wheat at 27.856 million bushels compared to last week’s 24.94 million bushels. India MMTC offered 100,000 tonnes of wheat from Pipavav port. Louis Dreyfus purchased this wheat at $301/tonnes. At a minimum, 700,000 tonnes have been sold by private firms this year.

India’s state grain reserves had 30.8 million tonnes at the start of the month. The minimum volume needed is usually just 10 million tonnes. India rejected bids from buyers who were looking to take part in tenders of 250,000 tonnes of wheat. The buyers were asked to meet a price of 303.40 or have their bid would be canceled. The highest bid was $296.87/tonnes.

Algeria’s wheat imports will fall around 15% this year to 5.3 million metric tonnes. The reason for the decrease is an increase of domestic production of 24% to 3.4 million tonnes. Algeria was a top 10 wheat importer last year. As more of the wheat moves out of dormancy and several areas receiving moisture, this crop could look a lot better coming out of the ground than it did going in…Cordon Sroka

About the Author

Ryan Ettner is a registered commodities broker and grains analyst at Allendale, Inc. Steve Georgy is a Sr. Broker/Manager at Allendale, Inc. Jim McCormick is Senior Broker/Manager at Allendale, Inc. Allendale is registered with the CFTC and NFA and is a member of the NIBA.

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