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Today we saw some follow-through strength on wheat from last Friday, while soybeans posed a good recovery from their activity late last week. Corn struggled on a lack of a bullish or bearish story and remained around unchanged. This week, albeit short, could be an interesting one. With markets closed Friday, Thursday's price action could show large swings. The report will be closely watched for carryout values (a function of supply and demand). Bloomberg's analyst survey reveals average estimates of 91.8 mln acres for corn and 86.5 mln acres for soybeans. This is versus the USDA February outlook of 91 mln acres for corn and 87.5 mln acres for soybeans. The trade is looking for 8.4 bln in corn supplies as of March 1st which assumes the feed usage upticked on lower prices. In regard to soybean acreage, the average trade guesses are centered around 86.5 mln, about 1 mln acres less than the market is trading, but pared with a 52 yield the US carryout is in excess of 350 mbu. It will take a normal sized US export program to pull down supplies to pull up futures.
Tensions seem to be flared overnight in the Ukrainian-Russian War with reports out saying that Ukraine has hit two landing ships, a communications center and other infrastructure used by Russia's Black Sea fleet off annexed Crimea. On Friday, Russia fired dozens of missiles at Ukraine, hitting a dam and leaving a million Ukrainians without power. The war remains active as ever, but if we turn back to a quieter period in the headlines, futures may sink again as we turn a blind eye to the risk again.
Export inspections were solid today. Marketing year to date corn export inspections total 961 million bushels, up 242 million bushels or 34% from the previous year's pace, and up 37 million bushels from the seasonal pace needed to hit USDA's target. Cheap prices continue to fuel demand, which means that we could see USDA bump its export, feed and ethanol corn use estimates in the April crop report. We'll get an idea on the feed usage estimate on Thursday when USDA releases its quarterly stocks report. Marketing year to date soybean export inspections total 1.343 billion bushels, down 309 million bushels or 19% from the previous year's pace, but up 14 million bushels from the seasonal pace needed to hit USDA's current target. Marketing year to date wheat export inspections fall short of the seasonal pace needed to hit USDA's target by 32 million bushels, versus being short by 36 million the previous week.
Brazil winter corn five-day rainfall exceeded 1" over 54% of the belt, and exceeded 2" over just 23% as rains fall short of forecasts. Fear is that they will be insufficient if pattern shifts drier again for April, which many anticipate. US Attaché to Brazil reduced its production estimate by 6 mmt to 152.6 this month. The USDA was 155 mmt in March. It’s reported that Brazil is 71% harvested vs 69% a year ago.
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