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Grain Comments: 03-01-2023

Good Morning

Soybeans as usual have led the rebound after a rough stretch for the markets as of late, but even then they are paring gains quickly into the morning hours, with corn barely higher if at all. The U.S. dollar slowly climbed through the most of February but has sharply reversed course this morning, weighing on commodities overall. It remains to be seen if the calendar flip to March changes the grains’ fortunes, but a bearish fundamental tilt is likely up into the March USDA S&D report a week from today.

U.S. precipitation remains north today with better action firing up in the south tomorrow, heaviest in the southeastern half of the belt through Friday with most of the Plains dry. The 6 to 10 day maps remain wet as well, with more varied forecasts now for the 11-15 day time frame. Temperatures will stay safely set in the below-normal category now all the way through the middle of March.

Argentine rains remain light and confined to fringe areas, with the bulk of corn and soybean areas dry through at least the next ten days, as temperatures hold above-normal as well. Brazil saw some isolated heavy rains in east central crop areas, with action widespread and heavy through Sunday as well, shifting center-north for the 6-10 day. Dryness lingers in the far south.

Now that the calendar has turned to March, we will start to see a change in market focus. The most notable will be a shift in market attitude from monitoring nothing but old crop demand to placing more interest on new crop production. The most watched will be indications of wheat we may see for US acres this year. In last week’s Ag Outlook Forum US acres were projected at 91 million on corn, 87.5 million on soybeans, and 49.5 million for wheat. Total US plantings are forecast to increase 6 million this year and be the highest total acreage since 2016. While this is a possibility, several factors will determine actual plantings, especially weather. Trade will now wait for the March 31st planting intentions report for more accurate numbers. The United States continues to see the La Nina deteriorate and outlooks indicate this will transition to an El Nino which tend to be favorable for production. Given the need for high production on all three crops, any potential for yield loss will receive a reaction in the market. We also tend to see a change in farmer attitude at this time of the year with more interest on spring planting than old crop marketing. It is not uncommon to see buyers extend bids for immediate coverage at this time, creating windows of marketing opportunity.

 

Have a great day!

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