Thursday, March 30, 2017

"PM markets: grains extend losses, ahead of 'big Friday'"

Following last year's March report our headline and intro were:

USDA Corn Reports: This Ain't Rock and Roll, This Is Genocide
I'm not sure why we have David Bowie doing the commodities report but it fits for the long corn crowd.*...
The report set up a rough day on that March 31st before the move higher, which was then crushed three months later when the June WASDE confirmed the earlier intentions report:

We're not looking for those kinds of fireworks although there may be some small upside surprises in the Soybeans/Corn acreage ratio.

From Agrimoney:
Friday will be a big day in the grain markets by anyone's definition, bringing the end of the week, the month, and the quarter, along with one of the most important data releases in the year.

"Month-end, quarter-end, and pre-report positioning dominate headlines and trading expectations," said Kim Rugel, at Benson Quinn Commodities. 

"Market lacks news and enthusiasm this morning trading lower overnight ahead of an expected bearish USDA report," Ms Rugel said. 

"Ag markets continue lower ahead of 'Big Friday'," said CRM AgriCommodities. 

Eyes on the stocks number
The US Department of Agriculture's stocks and acreage estimates will set expectations for the US summer season. 

Markets have probably factored in heavy soybean sowings, and a shift away from wheat, but perhaps more important is just how much corn, wheat, and soybeans are left 

"There probably be too much excitement around the acreage numbers, but what it could end up being [about] is quarterly stock numbers," said Steve Georgy at Allendale.
"How much do we have left over right now is the number we will be watching."

Risk-off sentiment
Mr Georgy also noted the end of month and quarter sentiments. "We're finding this risk-off mentality for grains," he said. 

This selling found no support from good wheat and soybean export sales numbers.
Weekly US soybean export sales were reported at 996,600 tonnes, beating expectations of 450,000 to 850,900 tonnes.

"Soybean sales and shipments are at record pace with USDA forecasting record large export demand for the marketing year," said Kim Rugel, at Benson Quinn Commodities.
"But with sales and demand shifting seasonally to South American, the big question with 23 weeks left in the marketing season, can shipments keep up with average weekly pace needed to meet forecast," Ms Rugel said. 

May soybean futures settled down 0.7%, at $9.62 a bushel. 

Soy/corn ratio falls
But corn export sales missed expectations, at 841,900 tonnes, where analysts estimated sales at 1.0 to 1.5m tonnes. 

May corn futures settled down 0.2%, at $3.57 ¾ a bushel. 

The closely watched ratio between new crop soybeans and corn, which farmers use as a guide to which crop will be more profitable, now stands at 2.53....MORE

Last Chg
Corn 357-4s-1-0
Soybeans 963-0s-6-0
Wheat 421-0s-4-4