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With no government reports out today, we saw the trade engage in some short covering ahead of next week's market-moving stocks & acres USDA report.
Wheat's short covering is being spurred as some risk premium builds in the market again after Putin's landslide victory has resulted in escalated tensions between Russia and Ukraine as Ukraine continues to strike Russian oil refineries, while Russia has retaliated by stepping up its attacks on Ukraine export infrastructure.
China offered 8.3 million bushels of soybeans at auction today, drawing the soybeans from its massive reserves. This is the first batch of offerings, which are expected to reach nearly 75 million bushels in the weeks to come. The current offering is meant to fill a void of low purchases from the United States ahead of the availability of new-crop Brazilian supplies – most of which are still on the water on their way to China. Chinese buyers purchased another 25 to 30 cargoes of soybeans last week, primarily for April and May shipment from Brazil.
StoneX Brazil will update its customer survey production estimates on April 1st, with adjustments expected following its March 1 estimates of 151.55 mmt for soybeans and 124.44 mmt for all-corn. The corn estimate is very close to USDA's estimate of 124 mmt, while USDA's soybean production estimate is higher at 155 mmt. We'll likely start to see the various soybean production estimates start to come together in the weeks ahead, with roughly two-thirds of the crop already harvested. StoneX Brazil's customer survey pegged the winter corn crop at 96.33 mmt on March 1st. Many other estimates are notably lower, using assumptions that area planted and yields both dropped significantly due to poor margins and adverse weather. Commodity Weather Group continues to beat the drum on a warmer and drier pattern settling in to Brazilian safrinha corn areas during the month of April, increasing crop stress over the next month-plus.
Argentina has a generally favorable forecast; rainfall over the last 10 days will be sufficient for a mostly dry pattern over the next 10 days, as temps are near average.
Headlines screamed bullish today as people read " EU tariff proposal on Russian goods". It is however worth noting that the EU imports very little in terms of ag products from Russia. The EU is expecting to import just 4.6% of its wheat from Russia in the 2023/24 season, and just 1.9% of its corn. The long term effects of this proposal however, will likely be negligible.
Funds were thought to have been mixed today with corn and wheat buyers and beans a seller.
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