GOOD MORNING,

Prices continue to leak lower as more funds sell the market in front of the March 31 Stocks/Acreage report.    With everyone in the same boat, (funds long everything but wheat), the only question is whether tomorrow’s numbers force changes to these positions.  Rising open interest in Chicago wheat, beans, and corn yesterday on lower price action could suggest that new shorts are also entering the market.  

Overall, traders are not buying before the March 31 report, fearing that the overall acreage numbers are going to be bearish.  But since prices will enter the report at the bottom of their ranges, the market may have already accounted for that outcome.   While expectations are for higher corn and bean acreage, the surprise and focus of the reports could be in the stocks numbers.  Those numbers have bullish potentials, and what the funds do with the numbers will be important for market price trend over the next several weeks.  

Wheat prices are beginning to feature some buying  interest at trading range lows, albeit it's probably short-covering at best.  Adding to wheat support were winter wheat ratings that did not show improvement following rains in the HRW areas.  However, global wheat prices are lower, which weighs on the market.  

Some of the ratings for winter wheat include:

Kansas:  50% Good/Excellent, unchanged from week ago

Nebraska:  38% Good/Excellent vs. 34% week ago

Texas:  28% Good/Excellent, vs. 29% week ago

North Dakota:  13% Good/Excellent vs. 16% week ago

South Dakota:  31% Good/Excellent vs. 41% week ago

Corn planting is 74% complete in Louisiana, 24% complete in Miss., and 4% done in Ark.

WEATHER

--South American weather forecasts show Brazil will see more rains in the northern areas this week and into next, which will help increase topsoil moisture.  Conditions in Argentina remain favorable.   

--US weather appears cooperative for planting with better chances of rain in the dry areas of the Northern Plains. 

ANNOUNCEMENTS

Ukraine's APK-Inform reported that wheat export prices fell about $20/mt week ago, explaining that crop improvement and lower demand contributed to the fall.  

China's National Grain Trade Center data showed 1.03 mmt wheat reserves sold at an auction, which was 25.8% of the total volume offered into the marketplace.  

Brazil's AgRural reported that Brazilian farmers had finished harvesting on 71% of the areas planted with oilseeds as of March 25.  Mato Grosso is nearly finished with its harvest.

South Africa estimated corn exports at 2.462 mmt, and Feb. ending stocks at 3.43 mmt vs. 49392 at the end of Jan.  

The sowing of Brazil's Safrinha crop reached 98% for the center -south of the country through last Thursday, according to AgRurual. 

CALLS

Calls are as follows:

beans:  7-9 lower

meal:  .80-.90 higher

soyoil:  60-70 lower

corn:  1 1/2-2 1/2 lower

wheat:  5 1/2-6 1/2 lower

OUTSIDE MARKETS

Crude oil prices lower at $60.20/barrel, and a still firming US dollar which trades up to 93.22.  The Dow is down 12 pts.

TECH TALK

• May bean prices slip to the downside on falling volume and breaks its 50-day moving average of $13.93, which now becomes daily resistance.  The price action also broke the previous uptrend channel, and the bottom of the channel at $14.02 becomes resistance as well.  The ADX trend is weak at 13, but the chart is seeing downside follow-through.  The market could reach $13.77-$13.80, but at this point has previous chart support to hold the break.  If short, would cover or price May beans at this point.  
• May meal is continuing to congest from $394.00 to $400.00, with downside momentum stalling.  The chart appears ready to exit the down-trend channel to the upside.  Top of the channel today is $405.00 and bottom is $390.00.  
• May soyoil prices congested from 52c-54c, with double lows so far at 52c.  This has been a strong market with the ability to put in a good bounce.  The pattern has also been to test key benchmarks, walk back to test them again before heading higher.  From the low in mid Jan at 41c to the high of 58c, the 38% Fib retracement is located at 5175c, making the 5175c-52c an attractive buying level.  While a high trade has been placed, the market would need to settle under 50c to suggest a top is complete.  
• May corn prices remain congested from $5.40-$5.55/$5.58 and is entering into very interesting trade in that the downside price action seems to have stalled.  When other markets are moving lower and corn cannot, is probably an indication that it is at a value level.  
• May wheat prices work back to key resistance at $6.16, which appears to be a third rally high that could be sold for another test of recent lows at $6.07.  On a break down to the recent lows, trendline support is located at $6.06, and would probably cover a short at that point.  

NOVEMBER BEANS

The major trend is sideways/lower with prices trending to new lows at $12.00, and closing atop the 50 day moving average at $11.97.  Closing into key support is never a sign of strength, and could open the door towards a lower target still at $11.80.  The chart has been breaking down after setting tops at $12.47/$12.50, and the ADX is at a weak 18, meaning that there is not much follow-through at either side of the market.  Since the market closed on its low, would look for follow-through to the downside, as technical weakness emerges.    Given that prices up to now have been strong, and that funds are still long, would cover a partial short, but may refrain from purchasing the market until we see what the report says.   Think we know whether $12.00 will hold at the open or not, but the new minor trendline that has formed appears ready to take prices down again for a continued break.  

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America