Soybeans were mixed mostly firm on old crop/new crop spreading and consolidation. On the negative side, the dollar was higher and the trade continues to keep an eye on the expected record South American soybean crop. Support came from the higher crude oil and gold, along with some concerns over recent harvest delays in Brazil and Argentina. That said – forecasts for the coming week do show a drier outlook for Brazil and warmer weather for Argentina. Argentina’s Ag Ministry reports soybeans are developing well but there are concerns over rainfall. Soybean oil was modestly higher on spillover from crude oil and product spread activity. Meal was steady to weak on that product spread trade but managed to move up from the recent 11 month lows. Ahead of the March 10 supply and demand update from USDA, the average estimate for 2009 soybean production is 3.350 billion bushels with an average yield of 43.8 bushels per acre, compared to January’s estimates of 3.361 billion bushels and 44.0 bushels per acre. U.S. ending stocks are seen at 195 million bushels, compared to 210 million a month ago.
Corn was lower on profit taking and technical selling along with spillover from wheat and the higher dollar. Fundamentals remain neutral to negative with a large domestic supply and not much new demand outside of some increase in ethanol use. Losses were limited by forecasts for a wet spring delaying planting. Contracts were up early on those forecasts and the higher Dow, gold and crude oil but couldn’t follow through. Still, newer forecasts do show a more gradual melt of Midwestern snow over the next couple of weeks, easing some of the flooding fears. Ethanol futures were higher. Argentina’s Rosario Grain Exchange raised its 2009/10 corn production estimate to 19.7 million tons, up around 1.5 million from its previous projection. With USDA’s production and supply and demand update out the 10th, the average projection for 2009 U.S. corn production is 13.081 billion bushels with an average yield of 164.5 bushels per acre, compared to January’s estimates of 13.151 billion bushels and 165.2 bushels per acre. 2009/10 U.S. corn ending stocks are pegged at 1.716 billion bushels, compared to 1.719 billion in February.
The wheat complex hit new two week lows on technical selling and the higher dollar. When the dollar goes up it makes U.S. goods more expensive on the export market – U.S. wheat’s already at a premium to competing export origins and the world supply is large. European wheat was lower on the fundamental bearishness of the wheat market; May Paris was down .2% and May London was .3% lower. USDA’s Commodity Credit Corporation bought 73,300 tons of U.S. hard red winter for Ethiopia while Malaysia picked up 25,000 tons of Australian milling wheat, Indonesia purchased 20,000 tons of Australian milling wheat and the Philippines bought 50,000 tons of feed wheat, which according to DTN, is mostly likely either from Brazil or Ukraine. Australia’s Bureau of Statistics reports wheat stocks as of January 31 were down 4.2% on the month to 17.02 million tons. Ahead of the March 10 USDA supply and demand update 2009/10 U.S. wheat ending stocks are placed at 971 million bushels, compared to 981 million a month ago.
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