Market Commentary  03/25/19 2:03:27 PM Printer Friendly VersionPrinter Friendly Version

Monday, March 25, 2019

Corn futures closed slightly firmer. Fresh news remains lacking as the trade awaits Friday’s Prospective Plantings & Quarterly Stocks reports as well as any updates on U.S./China trade negotiations. That leaves the weather in the forefront, as wet conditions increase concerns regarding spring planting. Even though its early, discussion is circulating regarding the situation in the WCB and N. Plains. It was reported that 57 counties in IA have been designated eligible for disaster relief and they were not impacted nearly as much as NE, the Dakotas & MN. To start the week, the forecast looks mostly dry for the Plains and Midwest, while the mid-South and most of the east coast is expected to be wet. Rains however are expected to move back into the central U.S. mid/late this week. Expectations for a wet spring are influencing acreage estimates as analysts start to step back their corn plantings forecasts. Bloomberg released estimates for Friday's Prospective Plantings report late last week, in which the corn area was estimated near 91.3 mln. acres. Quarterly Grain Stocks will also be released this Friday at 11am CST. The trade expects to see a decrease in corn inventories from a year ago. Weekly U.S. corn export inspections came in slightly above market expectations this morning at 39.2 mln. bu. This was an increase from the previous week but well below last year's same-week exports and below the roughly 43.2 mln. bu./week needed to reach USDA's 2.375 bln. bu. export projection.


Soybean futures were slightly higher today. Traders continue to await updates regarding U.S./China trade negotiations. Per a recent Reuters article, China is not conceding to U.S. demands to ease curbs on tech companies. The next round of talks is set to begin this Thursday (in China) with both Trade Chief Lighthizer and Treasury Secretary Mnuchin representing the U.S. Late Sunday, China Vice Premier Han Zheng stated that China will buy more U.S. goods ahead of the latest trade talks to achieve more balance. So, traders will be keeping an eye out for any flash bean sales in the coming days. Weekly U.S. soybean export inspections came in within trade estimates this morning at 31.5 mln. bu. This total was nearly unchanged from the previous week (31.2 mln. bu.) and in line with the roughly 32.0 mln. bu./week needed the balance of the marketing year to reach USDA's 1.875 bln. bu. export projection. For the month of February, China bought a total of 4.46 MMT of soybeans, an 18% drop from a year earlier and their lowest total since 2015. Of that total, 907,754 tons came from the U.S. vs. 3.35 MMT a year ago. Soybean harvest in Brazil continues to progress with AgRural forecasting Brazil’s beans to be 67%+ cut. In South America, the forecast for Brazil looks mostly dry in the south through the end of the week, with periodic rainfall expected in the north. Argentina’s outlook shows a mostly dry pattern the next 10 days.
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