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Grain Comments: 03-20-23

Good morning!

Wheat dominated the headlines over the weekend but soybeans led overnight volume with losses heavy up through the deferred months; the grains and commodities are mostly out of favor with the speculative traders as of late, particularly this week with the March FOMC on tap.

The Black Sea grain export deal was extended over the weekend following its expiration on Saturday, but the two sides could not agree on the length of the extension. Ukraine said the agreement was extended for 120 days as originally scheduled, but Russia only consented to a 60-day extension, and Russian officials this morning claimed that the other parties “have expressed no for-mal objections” to the shorter time frame.

Friday afternoon’s USDA Cattle on Feed Report showed all U.S. cattle on feed as of March 1 at 11.645 million head, or 95.5% of last year, and right around the average trade estimate; February placements came in at 92.8% of last year, below the 94.0% guess, while February marketings came in at 95.1% of last year, below the 95.6% expectation as well.

The Plains and Midwest were mostly dry over the weekend, but strong coverage is expected this week across most U.S. crop areas, heaviest in the south and lightest in the northern Plains/NW belt. Extended maps remain mostly active precipitation wise, with temps still lingering on the cold side of normal.

Argentina finally saw some scattered rains north to south over the weekend, for what it’s worth at this point; rains will hold north going forward. Brazil saw some decent coverage over the weekend as well with rains holding NW/ SW in the next week and some dryness lingering in NE corn areas.

While the data release is still two weeks away, we are starting to see more attention on the upcoming quarterly stocks and projected plantings reports that will be released March 31st. As for acreage, trade is expecting to see a jump in corn and wheat plantings and steady soybean acres from last year. In the February Ag Outlook Forum, the USDA projected acres of 91 million for corn, 87.5 million on soybeans, and 49.5 million for wheat. Several private analysts feel this year’s corn planting may come in above the Forum estimate, with some thinking corn acres could hit 92 or even 92.5 million. This is based off current market economics though, and while these do favor corn, wet soils may prevent acres from reaching that level. This is a topic that will see more debate as the spring progresses and well after the March report. As for the quarterly stocks, trade is split in its estimates. Last year the March 31st stocks totaled 7.85 billion bushels on corn, 1.93 billion bushels for soybeans, and 1.02 billion bushels on wheat. While opinions differ, several believe we will see more corn this year and less soybeans and wheat. While the acreage data tends to receive more publicity, the stocks data can have more of an impact on futures.

Have a great day!

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