Weekly grains update

  • Brazilian crop agency Conab said March 12 that it cut its estimate for the 2013-2014 soy harvest because of a drought in some growing areas.
  • Brazilian farmers will grow 85.4 million tons of soy in the current season, according to Conab, which in its February report had forecast a crop of 90 million tons. The 2012-2013 harvest was 81.5 million tons.
  • Conab also cut its forecast for the two 2013-2014 corn harvests compared with the February report, to a total of 75.2 million tons from 75.5 million tons. That compares with a harvest of 81.5 million tons in the 2012-2013 season.
  • The worst drought in about 40 years in the states of Sao Paulo and Minas Gerais is harming Brazil's soy, coffee, sugar and orange crops.
  • Brazil is the world's biggest producer of sugar, coffee and oranges, and the second-biggest producer of soy, after the U.S.
  • Sao Paulo and Minas Gerais states together are Brazil's biggest producers of oranges, sugar cane and coffee, while Mato Grosso state is the biggest producer of soy.
  • Conab cut its estimate for Sao Paulo's soy crop to 1.9 million tons from 2.1 million tons in its February crop report, and reduced the estimate for Minas Gerais' crop to 3.3 million tons from 3.8 million tons in February.
  • Conab raised its estimate for Mato Grosso's production to 26.4 million tons from 26.2 million tons in the February report. For another big soy-producing state, Goias, Conab cut the forecast to 8.6 million tons from 9.5 million tons.
  • Conab publishes the reports monthly, and it's possible the agency will cut its soy estimate even more. The survey for the March report was carried out from Feb. 16 through Feb. 22.
  • The soy harvest is near its peak in March, and heavy rains in Mato Grosso since the end of the most recent survey have made it difficult for equipment to enter the fields. Some of the soy could already be starting to rot on the ground, and that situation could grow worse if the rains in Mato Grosso don't let up, agronomists say.

 

WHEAT

General Comments: Wheat was higher on ideas of good demand and worries about dry weather in the southwestern Great Plains. Parts of Texas are too dry, and the dry área extends north into some parts of Kansas. Crops in southern regions of this área are coming out of dormancy. The dry áreas had been expected to get some badly needed precipitation from the storm that passed through the Midwest, but the storm tracked north of the dry áreas. Current US forecasts call for moderating temperatures as Spring tries to arrive.

However, the overall pattern supports colder than average temperaturas overall for the foreseeable future, especially in the Eastern half of the country. US export demand has been solid, but the potential world competition has been the primary negative for US prices as the US wants to remain competitive in world markets. Ukraine remains a feature, and the government there said that crop áreas in Crimea will not get planted. But, the rest of the country is expected to plant normally. Charts show that Wheat futures held some support áreas and might try to move higher today.

Overnight News: The southern Great Plains should see dry weather. Temperatures should average near to above normal. Northern areas should see dry conditions. Temperatures should average mostly above normal. The Canadian Prairies should some snow Saturday, otherwise mostly dry conditions. Temperatures will be near to below normal, but western áreas could see above normal temperaturas this weekend. 

Chart Analysis: Trends in Chicago are mixed to up with objectives of 668, 682, and 692 May. Support is at 656, 637, and 636 May, with resistance at 667, 679, and 692 May. Trends in Kansas City are up with objectives of 740, 759, and 768 May. Support is at 725, 707, and 703 May, with resistance at 738, 742, and 750 May. Trends in Minneapolis are up with objectives of 724 and 742 May. Support is at 706, 687, and 663 May, and resistance is at 716, 719, and 742 May.

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