The CFTC will presumably be caught up with its delayed reporting on Friday, not generally a notable fact for the market, other than the massive fund liquidation it has revealed, reaching almost a 300k contract net sale since mid-February. The grains and commodities remain out of favor in general with the marketplace focusing on the FOMC conclusion today.
Light precipitation is scattered throughout the Plains and belt this morning after decent rains in the northern and southern Midwest over the past 24 hours; action continues for all but the far northern Plains and NW belt through the weekend, with extended maps favoring the wetter side of normal past that as well, and temperatures holding below normal for most up through early April.
Rains will hold north in Argentina over the next ten days, for what it’s worth, with drier weather center-south aiding dry down into harvest. BRZ rains will shift from north to west to south over the next week into a drier 6-10 day, leaving some dryness concerns intact for northeastern safrinha corn areas.
Futures were hit hard in yesterday’s trade, especially soybeans and wheat. Soybeans took their pressure from revised Brazilian crop estimates with one firm raising production 2 million metric tons (mmt) to a record 155 mmt. This is also 2 mmt over what the USDA is using in balance sheets and helps offset some of the ongoing losses in the Argentine crop. The firm also projected exports of 96 mmt which is a record. Ongoing record soybean yield reports support this higher crop estimate. Basis continues to collapse in Brazil which is also pressuring futures as demand is focused on Brazil offers. We are hearing reports of Argentine sales shifting to US origination but given the discount for Brazil offers it seems unlikely this is happening to a large volume. That said, US balance sheets cannot afford much more demand regardless of where it is from. Tight soybean inventory is a US issue, not a global one. Wheat futures also suffered heavy losses as speculation China will ink a large purchase of wheat from Russia following their meeting surfaced. Even without this deal the US is not seeing much demand, but the deal would simply remove a chance for business. For today’s trade we will get the weekly ethanol data and trade is expecting to see near record ethanol inventories. We will also await the Fed’s decision on interest rates which is scheduled to be released at 2:00 PM ET.
Have a great day!