THE OPEN

May beans:  16 higher

May meal:  5.70 higher

May soyoil:  24 higher

May corn:  1 lower

May wheat:  3 higher

The markets opened as called with weaker grains following the soy complex in its opening rally high.  Prices broke lower on the day in reversal trade, with major levels of support tested after a strong open.  Buy bean/sell corn and wheat trade was the feature, while meal briefly gained on soyoil.  Negative seasonals and fund liquidation weighed on price action. 

As we approach the March 9 WASDE report, would look for more guesses for SA acreage as well as US estimates.  FC Stone forecast the bean crop in Brazil at 133.48 mmt, vs. 132.77 mmt last month.  They forecast the total corn crop lower at 108.5 mmt vs. 110.22 mmt last month. 

At 10:00 export inspections were released as such:

beans:  879,582 mt vs. 803,548 mt week ago (vs. an expected 600,000 mt)

wheat:  272,820 mt vs. 324,597 mt week ago (vs. an expected 400,000 mt)

corn:  1,636,876 mt vs. 1,266,555 mt week ago (vs. an expected 1,450,000 mt)

Inspections for corn and beans were supportive, while neutral to bearish for wheat.

SOY

• The markets traded as expected with an opening rally that reversed itself with trade lower by midday in all three components of the soy complex.  Inverses weakened throughout the session from the start of the day.   
• May oilshare traded to 37.0% with crush trading at 69c/bu.  May beans filled in its gap at $14.08 which triggered sell-stops as trade for the moment is extremely technical.  November beans slide towards $12.20, but that level finds good technical support for what could be the lower end of a $12.00 to $13.00 trading range.    
• In the inspections report for beans released at 10:00, inspections are up 34% vs year ago, and above expectations, which added to the ability for prices to firm after the release.  However, net profit-taking then continued as grains fell. Spread trade continues with July/Nov beans trading down to a lower inverse of 1.60c from 1.72 1/4 c.  May/July bean inverse trades from 14 1/2c highs to 8 1/2c.  
• Meal remains a steady trade vs. soyoil as traders book profits on oilshare.   At midday, front month liquidation and bull market profit-taking continues, while deferred prices remain well supported. Meal is narrowly mixed as traders book further profits in oilshare, which finds soyoil futures down 65-75 pts. mirroring losses in crude as well.  Crude is down to $59.96/barrel as warmer and drier weather hits the Midwest.

GRAINS

• Wheat prices hit a snag, dropping under key support in May at $6.60 that triggered a better round of liquidation.  The sell-off continued as trendline support at $6.53 was also violated in May wheat, triggering stops and a dip under the $6.50 benchmark.  
• Wheat inspections were bearish, which weighed on the market, along with a higher US dollar.  Traders therefore were sellers on macro and fundamental ideas.  The wheat inspections number was at its lowest level since last October, with the Feb. winter extremes disrupting logistics.  May corn prices sagged into the close and extended losses, as funds are longest here.  
• May prices tested trendline support at $5.38 but appears ready to consolidate around $5.40.  However, we are currently trading an outside day in corn, so a lower close would be technically negative.  Corn inspections were higher on the back of better shipments to China and Japan.  
• In the report, an estimated 347,000 tons were inspected for shipment to China, while nearly 343,000 mt was inspected for Japan.  At midday, prices are trying to hold at key trendline support levels, which will make the close a negative event if prices cannot hold.  Generally, returning to market lows shows some inherent weakness at best.

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                                HI                              LO

May beans:  6 lower                             14.22 1/2                   13.94

May meal:  .60 lower                            427.20                       418.30

May soyoil:  75 lower                              50.62                         49.16

May corn:  7 lower                                5.54 1/4                      5.38 1/4

May wheat:  10 lower                              6.66 3/4                      6.49

May canola:  2.40 lower                         747.80                        735.50

OUTSIDE MARKETS

The stock market is over 600 pts higher with crude oil trading down to $59.96/barrel and the US dollar trading up to 91.12.  A combination of new stimulus and new vaccines keeps prices slanted.  

CLOSING COMMENTS

The market was extremely choppy today and perhaps a foreshadowing of trade to come for March, as the mission of the markets are now to determine value trading ranges.  Seasonally it is the more difficult time to keep prices higher, but if prices head lower into April trends could strengthen again.  

At the end of the month, we get March 1 stocks and Planting Intentions, while March 9 WASDE is close by.  Traders are hoping for 182 million corn and bean acres combined to ease a tight supply situation.  

Look for choppy markets to continue throughout the month of March, but would continue to price, own, or cover shorts at the lower end of trading ranges.  March US weather will set the stage most likely for the next big direction, but today too many long funds are weighing prices down.  

Ranges could be as follows:

May beans:  $13.80-$14.25, still have to respect $13.80 as better support while resistance at $14.25 is light

May meal:  $415.00-$430.00, lower values today suggest that price consolidation may be a bit lower from $415.00-$435.00

May soyoil:  4850c to 5095c and would continue to cover shorts or go long on 100 to 150 pt breaks.  Market is trying to alleviate overbought conditions.

May corn:  $5.25-$5.72, so far market is testing trendline support at $5.38, but this is now an outside day.  Price action is heavy, and if prices trade under $5.38 will open the door to $5.25.

May wheat:  $6.45 to $6.75, continue to straddle/strangle here.

Have a good evening....

 

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