Grains and oilseeds mostly lower ahead of USDA numbers

Soybeans were mostly lower with traders getting ready for the USDA supply and demand update. The trade expects USDA to lower the 2009 production estimate and domestic ending stocks with the report out at 7:30 AM Central on Wednesday, March 10. That said – USDA could also raise South American production estimates. Two new Brazilian estimates were out Tuesday with Brazil’s National Commodities Supply Corp. or CONAB pegging the crop at 67.5 million tons and Brazil’s Census Bureau or IBGE projecting beans at 66.9 million. Brazilian ag consultancy Celeres, via Dow Jones Newswires, reports 32% of Brazil’s 2009/10 crop had been harvested as of March 5. Contracts made one month lows early before pulling back up on a lack of follow through selling. Soybean oil was up modestly on product spread adjustments. Meal was steady to weak on that spread activity, hitting a one year low during the session.

Corn was lower on technical and fund selling, in addition to pre-report position squaring and pressure from the higher dollar index. Traders see USDA making downward revisions to 2009 production and average yield estimates. However, ending stocks should be just about unchanged from last month due to slack demand and some in the trade seem to be more focused on prospective 2010 planting estimates out March 31. Ethanol futures were lower.

The wheat complex was lower on technical and fund selling, along with the higher dollar and spillover from corn. Fundamentals for wheat remain extremely bearish with a large supply and poor demand for U.S. wheat. Those negative fundamentals should be reflected in the upcoming supply and demand numbers with domestic ending stocks expected to see a modest decline. USDA’s National Ag Statistics Service reports 60% of Kansas’ winter crop is in good to excellent shape, up 7% on the week, with jointing at 4% and 20% of the crop out of dormancy thanks to warm weather. European wheat was mixed following the currency markets; May Paris was down .2% and May London was flat. According to Dow Jones Newswires, Jordan’s government has taken a $100 million loan from the Jordan Islamic Bank to buy wheat and barley. Japan issued a tender for 152,000 tons of wheat (42,000 tons Australian standard white, 40,000 tons U.S. dark northern spring, 25,000 tons Canadian western red spring, 25,000 tons U.S. western white and 20,000 tons U.S. hard red winter) and Egypt is tendering for 120,000 tons from a variety of sources.