Corn, wheat lower on supply, outside markets

Soybeans were mostly steady to higher on technical buying and short covering. Outside markets were bearish, but weekly export inspections were good and February’s crush numbers were strong than expected. Also, there are reports of harvest and shipping delays out of Brazil. In any event, it was an up and down day with good near term supply and demand expectations at last partially offset by increasingly bearish long term supply and demand outlooks. The National Oilseed Processors Association reports member firms during February crushed 148.351 million bushels, compared to the average pre-report estimate of 144.5 million and the January total of 162.397 million. Soybean oil stocks came out at 2.852 billion pounds, compared to 2.695 billion in January and 2.501 billion in February 2009. Soybean oil was lower on profit taking and product spread trade while meal was up on that spread activity. Paraguay’s grain export body, via Dow Jones Newswires, reports 75% of that nation’s soybean crop has been harvested with the expected total at a record 7.2 million tons, up sharply from last year on improved weather and larger planted area.

Corn was modestly lower on fund and technical selling, along with spillover from the outside markets. The dollar was up while the Dow was down and crude oil was sharply lower, and fundamentals are negative, especially on the supply side. Losses were limited by continued concerns over spring planting delays as traders continue to get ready for USDA’s March 31 prospective planting report. South Korea had a flurry of activity in the export market: purchasing outright 275,000 tons of U.S. corn, buying 275,000 tons of U.S. corn from a foreign seller and switching 176,000 tons from unknown destinations to South Korea. The total, 726,000 tons, is slated for delivery during the current marketing year which ends August 31. Ethanol futures were lower.

The wheat complex was lower on fund and technical selling, in addition to the higher dollar. When the dollar goes up it raises the price of U.S. goods on the export market. Fundamentals are very negative – U.S. wheat is already at a significant premium to competing exporters and the world supply is very large with no major crop weather problems currently; those world stocks include a more than two decade high for domestic ending stocks. Losses in Minneapolis were lessened by concerns over hard red spring planting delays. European wheat was steady to firm with support from the Pound and Euro losing ground against the dollar; May Paris was flat and May London was up .2%. Iraq’s Grain Board issued a tender for at least 100,000 tons of hard wheat from any origin.