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Grain Comments: 03-06-2023
Good Morning
Corn and soybeans only briefly traded higher last night be-fore quickly shifting to the low side, at least remaining range-bound following Friday’s rally; wheat was not so lucky with the most-traded May Chicago contract dipping below the $7 per bushel for the first time since its early days.
Heavy rains fell southeast over the weekend as expected with light snow north; another active precipitation week is on tap for the Midwest and northern Plains, again likely light in the central-southwest Plains, with above-normal precipitation lingering past that as well (along with continued cold temperatures).
Argentina was dry over the weekend, but rain chances are in the forecast south and west over the next ten days, drier center-east; Brazil was again wet over the weekend with continued rains center-north over the next week-plus. Some harvest/fieldwork concerns linger as well as dryness issues in the far south.
Much of the focus of trade to start this week will be on positioning for the March WASDE report that is scheduled to be released this Wednesday at 11:00 AM CT. Changes to domestic balance sheets are expected to be minimal, although trade is anticipating reductions to demand on both corn and soybeans. This is mainly on corn and the result of exports which have trailed predicted volumes all marketing year. It has been thought this demand would increase once Brazilian exports slow, but this has not been the case. At the present time US corn exports are 18% under the current WASDE estimate. To see the USDA reduce corn exports by 100 million bushels this month would not come as a surprise. We may also see reductions to feed demand given lower livestock numbers. Soybean sales have also indicated they will slow, but the USDA may be hesitant to reduce its export forecast at this time. Wheat demand remains steady, and it is unlikely we see a major change in yearly expectations. The most interest in the monthly report will again fall on South American production where privates have lowered their forecasts for both Brazil and Argentine crops. The question is how much they may be lowered, and if total South American production will remain record sized.
Have a great day!
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