Agricultural Commodities:--Ahead of Today's Big USDA WASDE Report: Dollar Strengths Ensures Weak Start for Ags

Pretty much all the ags are trading down a penny to a nickle after some book-squaring yesterday.
It's too early in the U.S. growing season to get very excited about the reports, they'll end up being excuses for moves rather than reasons. More to come.
From Agrimoney:

The first of the three big batches of data expected on Tuesday went bears' way.

The Malaysian Palm Oil Board estimated Malaysian palm oil inventories last month at 1.74m tonnes - down 1.5% from the January number, and a seven month low, but above the 1.67m-tonne figure that investors had expected.

While production dropped 3.4% to 1.12m tonnes, just about as expected, exports dropped 18.4% to 971,640 tonnes – the lowest figure since July 2007, and a bigger drop than analysts had forecast.

Palm oil futures for May stood 1.7% lower at 2,233 ringgit a tonne in Kuala Lumpur as of 09:20 UK time (03:20 Chicago time), falling back below their 100-day moving average for only the second time in the past month.

More data

Still, there are two important reports yet for agricultural commodity investors to get their teeth into.

The next is from Conab, the Brazilian crop bureau, which unveils monthly crop data later, statistics will especially closely monitored for any change in the estimates for the soybean crop, currently being harvested, and the safrinha corn sowings which follow.

AgRural became the latest analysis group to revise its forecast for the Brazilian soybean harvest, actually lifting the figure by 1.5m tonnes to 93.4m tonnes.

Many other commentators have been cutting their estimates, citing early year dryness, and rains since which have slowed harvest and potentially caused a bit of crop damage.

Still, "the trade is honing in on a Brazilian production estimate in the range of 92.5m-94.5m tonnes," said Brian Henry at Benson Quinn Commodities.

'Delays to fieldwork'

Indeed, the third set of data today, from the US Department of Agriculture on world crop supply and demand, in its monthly Wasde report, is expected to show a Brazilian soybean production figure of 94.0m tonnes, which would represent a 500,000-tonne downgrade.

The Wasde is also expected to cut the estimate for Brazilian corn output by 380,000 tonnes to 74.62m tonnes, while raising forecasts for Argentina's corn crop by 540,000 tonnes to 23.54m tonnes, and soybean harvest by 880,000 tonne to 56.88m tonnes.

That said, some of the optimism over Argentine production has been eroded by heavy rains which have caused some flooding in growing areas.

And there remain concerns over wetness in Brazil too.

"There will be some delays to fieldwork in Brazil and that will slow early supply," said Tobin Gorey at Commonwealth Bank of Australia.

"Traders will probably want a more favourable weather pattern for fieldwork to persist in the forecasts before assuming South American soybean supply will not be materially delayed."

 Brazil strike threat

The theme of delays to Brazilian supplies reaching port, thanks to industrial action by truckers, remains live too, with a meeting today which it is feared could, if it goes wrong, bring a fresh round of industrial action.

"Brazil government officials and trucker representatives reportedly will meet again to talk about lower fuel prices and higher transportation rates," Terry Reilly at Futures International noted.

CHS Hedging said: "There is talk that the Brazilian trucker strike may start back up if Tuesday's meetings with government officials aren't successful."

Still, for now, soybeans for May dropped 0.7% to $9.86 ¾ a bushel for May delivery, undermined in part by a stronger dollar, which got off to a strong start, adding 0.6% against a basket of currencies....MORE