Grains climbed early in the week but losses on Friday left the market on a down note. On the close for the week, corn was unchanged, soybeans were up 4 and Chicago wheat up 2.
This week’s trade was focused on USDA monthly estimates, which showed a few surprises in corn. The US carryout was cut thanks to a 125 MB increase in USDA’s annual export forecast, while world stocks were cut thanks to a 3 MMT cut to Argentina’s corn crop. On the surface these revisions appeared bullish but the market showed little buying enthusiasm, finishing Thursday’s trade unchanged. The new US export figure will certainly be a lofty estimate to hit. Year-to-date export commitments are 17% behind last year, but USDA’s new annual forecast would only be 11% lower than last year.
For soybeans USDA slashed exports by 60 MB pushing ending stocks to 530 MB carryout. On the world front, a 2 MMT reduction in Argentina’s soybean crop to 52.0 MMT was offset by a 2.0 MMT increase in Brazil to 112.0 MMT. Weather in Argentina will likely overshadow the bearish soy data. Heading into the weekend rains should hit Central Argentina but the South may miss out so coverage and follow up rains with be needed.
The wheat market continues to get supported by drought in the Southern Plains. The latest drought reading shows all of TX, OK and most of KS firmly gripped by drought. There is some rain expected a week out in the driest parts of OK, but meteorologists suggest the dryness will continue to be a threat until April.
National Cash Market:
In the cash market, it was another unimpressive week with US corn and soybean average basis unchanged.
The negative on the week was in milo, where losses of 40 to 80 cents a bushel hammered the market after China announced they would pursue antidumping claims against the US on milo. This helped soften the Western Corn Belt and Southern Plains where feedlot demand has been white hot for feed stuffs to supply a burgeoning cattle supply. With the recent rally in the board, feedlots have seemed to move their coverage ahead a few months into summer.
In the end user market, basis was also mostly unchanged. There was some isolated quick-ship bids in IA thanks to an early week snow storm that spawned a few nickel pushes for immediate delivery. River markets also were stagnant this week. At the Gulf, corn basis was up 3 but soybean basis was unchanged.
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