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Prices updated as of 6:55 a.m. CDT.
What we’re watching
Establishing a grain marketing strategy now, in the relative calm before the growing season “storm,” can help farmers gain a clear view and free their minds to focus on planting 2025 crops, ag risk management advisor Brett Mapel writes in an Ag Marketing IQ post. For starters, establish a floor, then look up.
USDA stood pat on its South American crop estimates while hiking wheat stocks forecasts more than expected. Catch up on Farm Futures’ coverage of Tuesday’s USDA Supply and Demand report.
What some refer to as agriculture’s “silly season” is underway, and it’s no laughing matter for farmers. Grain markets may grow increasingly volatile in the months ahead amid changing weather and geopolitical turmoil. That’s why it’s a good idea to get a firm handle on your marketing strategy now. Advisor Brett Mapel details three moves to consider in an Ag Marketing IQ column.
U.S. corn supply outlook not as tight as expected
May corn fell 7.75 cents to $4.6250 per bushel late in overnight trading after dropping 1.75 cents Tuesday to end a four-day winning streak. In early trading Tuesday, May futures touched $4.7750, the contract’s highest intraday price since February 28. December futures fell 5 cents to $4.4950 overnight.
Despite Tuesday’s soft finish, corn’s sharp bounce from a 2 ½-month low a week ago has shored up market technical to some extent, though May futures remain well-below a 14-month intraday high around $5.19 hit in mid-February. Near-term support includes the 200-day simple moving average (SMA) at about $4.56.
Commodity funds have reduced a historically large bullish bet in corn futures but appear inclined to defend a still-sizable net long position for the time being, barring another technical breakdown or a severe turn for the worse in trade tensions or the global economy.
Prices came under pressure after USDA kept its estimates for Argentina’s corn crop and for U.S. 2024/25 ending stocks unchanged, contrary to analyst expectations for reductions to both numbers. USDA kept its Argentina and Brazil corn production forecasts unchanged at 50 million metric tons (1.97 billion bushels) and 126 MMT (4.96 billion bushels), respectively.
And despite continued signs of strong demand, U.S. corn stockpiles later this year also won’t be as tight as thought previously, according to USDA. USDA left its 2024/25 ending stocks projection unchanged at 1.54 billion bushels. Analysts expected a cut of about 24 million bushels. Major demand categories were unchanged, with estimated exports held at 2.45 billion bushels.
At the U.S. Gulf Coast, corn export premiums firmed slightly Tuesday amid brisk demand following a slowdown in farmer sales in recent weeks, traders told Reuters. Bids for CIF corn barges loaded in March rose 2 cents to 68 cents over May futures. April corn barges rose 1 cent to 67 cents over futures. April FOB offers climbed 2 cents to 77 cents over futures.
Big Brazil crop burdens soybeans
May soybeans fell 5.75 cents to $10.0550 late in overnight trading after shedding 2.75 cents Tuesday to $10.1125, the contract’s third straight daily decline and its lowest settlement in a week. November soybeans fell 6.5 cents to $10.09 overnight.
Soybean technicals continue to lean bearish, with large speculators returning to the sell side after buying actively late last week. Funds were net sellers of about 9,500 futures contracts the first two days this week.
May futures remain in a near five-week downtrend after hitting a four-month intraday high of $10.9250 on February 5. Further price weakness could prompt bears to test the 2 ½-month intraday low of $9.91 posted March 4.
May soybean meal fell 60 cents to $301.20 per ton. May soybean oil fell 13 points to 41.80 cents per pound after dropping earlier to a two-month low. Malaysian palm oil futures were little changed after tumbling 3% the previous two sessions.
Soybean prices remain under pressure from eroding U.S. exports and heavy supplies from South America’s harvest.
Brazil's soybean exports are expected to reach 15.45 MMT (567.6 million bushels) in March, up more than 4% compared with last week's forecast and up 15% from March 2024, according to data reported Tuesday by the grain exporters lobby Anec.
In Tuesday’s report, USDA kept its forecast for Brazil’s 2025 soybean harvest unchanged at a record 169 MMT (6.21 billion bushels), contrary to analysts’ expectations for a slight increase to about 169.2 MMT. Argentina’s estimated soybean crop was held at 49 MMT (1.8 billion bushels). Analysts expected a cut of about 0.2% based on beliefs drought in some of the country’s key growing areas may have curbed yields.
Brazil’s harvest would still be up nearly 11% from 2024 if its crop comes in around the USDA forecast. Projected global soybean stocks at the end of the 2024/25 marketing year were cut 2.4% to 121.41 MMT, contrary to expectations for a slight increase but still up almost 8% from 2023/24.
At the Gulf Coast, soybean basis bids were mixed. Bids for CIF soybean barges loaded in March fell 1 cent to 73 cents over May futures. April barges traded at 75 cents over May futures. FOB export premiums for April loadings rose about 3 cents to 89 cents over futures.
Wheat pressured by increasing supplies
May Chicago SRW wheat fell 4 cents to $5.5275 late in overnight trading after slipping 5.75 cents Tuesday to $5.5675.
Chicago wheat’s rebound from a contract low of $5.30 on March 4 has lost momentum this week, with funds turning net sellers Tuesday after buying earlier this week. Fund managers still hold sizable bearish bets in wheat, having sharply expanded a net short position earlier this month. Near-term upside targets include the 50- and 100-day SMAs at $5.6950 and $5.73, respectively.
May Kansas City wheat fell 4.5 cents to $5.6750 while May Minneapolis wheat fell 4.75 cents to $5.9250 (see charts below). Both markets have bounced back from contract lows posted March 4.
Wheat futures slipped after USDA said it expected global supplies at the end of 2024/25 to be about 1% higher than previously forecast. USDA pegged ending wheat stockpiles at 260.08 MMT (9.56 billion bushels), up from 257.56 MMT in its February report. Analysts expected only a slight increase.
The higher stocks outlook reflects stronger harvest prospects for Argentina, Australia and Ukraine. Global wheat stocks would still shrink to a 10-year low, based on USDA’s latest forecast.
Price pressure also stemmed from USDA’s adjustments to the U.S. balance sheet. U.S. wheat stockpiles at the end of 2024/25 will reach an estimated 819 million bushels, up from 794 million bushels in a previous forecast, up 18% from 2023/24 and a four-year high. Stocks were expected to rise by only about 3 million bushels.
USDA also lowered 2024/25 exports by 15 million bushels to 835 million bushels and trimmed the average estimated farm price by 5 cents to $5.50.
On cash markets, hard red winter wheat basis levels held steady across Kansas on Tuesday. Bids at country elevators ranged from 59 cents under May futures in central locations to 90 cents under futures in the west. Terminal elevator bids ranged from 30 cents under May futures at east and central locations to 70 cents under futures in north and south regions.
Wetter weather ahead for Midwest
This week’s Midwest warm-up will extend another couple days, with temperatures expected to climb into the 60s and 70s Fahrenheit across the region through at least Friday before colder, wetter weather arrives over the weekend. Rain is possible for most of the Midwest today through Saturday, with heaviest amounts likely over Illinois, Indiana and southeast Missouri, based on NOAA’s 72-hour precipitation map.
Later this month, temperatures across the Midwest and Northern Plains are expected to reach above-normal levels, according to the National Weather Service’s latest 8-to-14-day outlook, covering March 19-25. Above normal precipitation is expected for most of the region during that period.
Stock futures rise ahead of CPI report
Stock index futures climbed overnight following two days of sharp declines as investors awaited the first of two key U.S. inflation readings this week. The Labor Department’s February Consumer Price Index (CPI), scheduled for release at 7:30 a.m. CT, is expected to post an increase of about 0.3% over January.
Futures based on the S&P 500 and the Dow industrials indexes rose 0.9% and 0.6%, respectively. The U.S. dollar index rose 0.2% in a modest bounce from four-month lows hit Tuesday. April WTI crude oil futures rose 70 cents to $66.95 per barrel.
What else I’m reading at www.FarmFutures.com this morning:
- Don’t expect egg supplies to loosen up or high egg prices to ebb any time soon. It could take the U.S. poultry industry a year or so to recover from the recent avian influenza outbreak, Indiana Farmer’s Allison Lynch reported.