THE OPEN

May beans:  4 1/2 lower

May meal:  4.50 lower

May soyoil:  12 higher

May corn:  5 1/2 lower

May wheat:  1 1/4 lower

Prices opened as expected but turned softer as the US dollar gained in strength.  Beans and meal dropped lower against higher soyoil, pushing oilshare higher again.  Soyoil prices quickly rebounded off session lows.  A sense that higher acreage forecasts could be coming created a market flush of length as funds were noted taking risk-off in front of Wed. report.  

At 10:00 export inspections were as follows: 

beans:  425,364 mt vs. 495,329 mt week ago (vs. an expected 362,500 mt)

corn: 1.695,215 mt vs. 2,017,525 mt week ago (vs. an expected 1,725,000 mt)

wheat: 302,188 mt vs. 653,755 mt week ago (vs. an expected 625,000 mt)

Export inspections fell to the lowest level in nearly a month for beans.  Buying in corn was mostly from Japan, a traditional purchaser.  

SOY

• The soy complex traded mixed on the day with end -of-month liquidation prominent.   The slight push in May beans in the PM session through trendline support at $13.95 was a foreshadowing of weaker trade to come.  
• May beans trigger sell-stops when prices take out the 50-day moving average at $13.93.  November bean prices traded towards major support at $12.00, with its 50-day moving average located at $11.98.  At midday, the $12.00 level remains intact, and could remain that way into the close.  
• May soyoil quickly enters congestion trade from 52c-54c, jumping back over 53c which signals it is ready for upside retracement of the break.  
• May meal breaks towards the lower end of its range at $395.00 but finds those willing to price something.   July crush trades to a new ctr low but quickly finds support as beans break lower, trading up to 56c/bu lows from values that were under 50c/bu.  July oilshare firms to 38.62% as soyoil prices find its footing.  
• At the midday hour the soyoil market remains well bid, and is rallying back indicating that the downside could perhaps have been overdone.  Soyoil strength does the job of cushioning the bean market, which comes back from early morning losses. 
• Spreads also find support as prices come back at midday, with July/Nov beans trading up to 1.84 3/4c from 1.71c, while the May/July inverse finds buying from new lows of 7 1/2c.  Beans also come back vs. corn, as this market has to stand its ground in order to buy acreage. 

GRAINS

• Grains found more selling pressure on expectations of higher acreage to be released on Wed. Planting Intentions report.   Unwinding of previous buy corn/sell wheat spread trade was evident, as May corn fell towards the lower end of its trading range at $5.40, with Dec corn trading below the 50-day moving average of $4.63.   
• May wheat falls to the bottom of its trading range and finds some short-covering activity right at trendline support at $6.07.   Kansas City wheat futures hit a new trading range low for the move down at $5.58 1/4, without chart stabilization.  However, KC wheat is approaching a slightly oversold condition with RSI at 31%, not enough to yet suggest a turn is coming.   
• Corn continues to struggle on higher acreage forecasts and a slight turn in global trade flows, with China now purchasing Ukraine origin vs. US.  Corn inspections were down for the week, with Japan, China, and Mexico the primary destination.   Total inspections for 20/21 are now at 1.328 bln bu, up 86% vs. year ago.  USDA is forecasting corn exports at 2.6 bln bu in 20/21, which is 46% higher than year ago.  Wheat falls to the bottom of its trading range technically hitting trendline support before entering into a short-covering bounce.  Funds may have turned from a net long into a small short.  
• Wheat inspections for 20/21 are now at 746 mln bu, down 1% from year ago.  USDA estimates wheat exports at 985 mln bu for 20/21 which is up 1% from the prev. yr.  Corn spreads leak lower with May/Jy at 15 1/4c from 17c, while July/Dec inverse trades from 70 1/2c down to 65 3/4c.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                              hi                        lo

May beans:  1 lower                         14.02 3/4            13.83

May meal:  5.00 lower                        404.80               397.00

May soyoil:  1.30 higher                      54.03                 52.00

May corn:  5 lower                             5.52                   5.42 1/4

May wheat:  2 1/2 lower                    6.16 1/2             6.07 1/4

May canola:  5.00 lower                    759.00               744.40

OUTSIDE MARKETS

The Dow opened 150 pts lower but has turned and traded both sides of unchanged.  Crude oil prices firm to $61.77/barrel with the US dollar at 92.96.

CLOSING COMMENTS

Prices are anticipating the numbers on March 31, now factoring in better SA weather, a potentially decent US spring April planting scenario, and higher acreage forecasts come Wed.  Since prices are now on the defensive, if we do get a neutral report on Wed. funds may continue to purchase Ags in front of the US growing season, which has to be fairly ideal in order to satisfy demand.  In between there are both negative and positive stories.  But until we see carryout numbers actually rise for corn and beans, the market will continue to skirt the lower end of ranges, with some even wanting to get long in front of the US growing season.  

Soyoil futures remained impressive and helped beans to stabilize.  Still think that these lows offer up an excellent opportunity to scale-down cover a short or price.  While the markets bend, they do not break that much, a comment that does not pertain to wheat.  Even wheat can have its day, however, as it can rally on order flow alone.  Would scale down cover in wheat at these lows, and perhaps stand aside and watch to see where we go after the report is out Wed.

 

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