March 20 Afternoon Comments

By Steve Freed

Soybeans, soymeal and wheat ended higher. Corn and soyoil prices were unchanged. News US trade representatives were going to China next week offered support.  

SOYBEANS

Managed funds continue to be net short soybean and soymeal going into the end of the month USDA report.  Most are estimating US March 1 soybean stocks near 2,780 mil bu vs 2,109 last year. Higher stocks due to higher crop and lower export demand. Some estimate Dec-Feb total demand near 1,000 mil bu vs 1,050 last year. This includes a crush near 532 vs 516 last year and exports near 490 vs 595 last year. US Sep-Feb exports are estimated near 1,000 mil bu vs 1,451 last year. Most of the trade is still watching for news on a new US and China trade deal. Most feel soybean prices could rally once a deal is announced but there may not be additional China buying of US soybeans. Record large World soybean supplies, higher 2019 South America supply and lower China soybean imports continues to offer resistance to futures. Key moving average level of resistance is near 9.15-9.20 on the May. 

Soybean Futures Chart

CORN

Managed funds continue to be net short a record amount of corn contracts going into the end of the month USDA report.  Weekly US ethanol production was down from last week and last year. Stocks were up from last week and last year. Ethanol futures have bounced on logistic issues. Margins are still negative. USDA estimates US corn use for ethanol near 5,550 mil bu vs 5.605 last year. Feed demand is estimated near 5.375 mil bu vs 5.304 last year. There are some that feel USDA may be overestimating US 2018 corn crop due to late season dryness. Next week USDA will release an estimate of US March 1 stocks. Some feel stocks could be below the average trade guess if the crop was smaller. Most of the trade is still watching for news on a new US and China trade deal. Most feel corn prices could rally once a deal is announced. Declining World corn supplies and the potential increase in China corn, DDG and ethanol imports could offer support to futures. May corn is testing initial level of moving average resistance.  3.80 remains key resistance. Need China demand or weather problem to push through that level.

Corn Futures Chart

WHEAT

Chicago wheat futures are higher. Chicago May futures have rallied 30 cents from recent lows in part due to rumors China may buy US wheat if there is a new trade deal and higher Black Sea and Europe prices. Chicago May is back to near the 20 day moving average level of resistance. Need a global weather problem to move prices higher. Managed funds are record short wheat and grains. Most of this due to talk that 2019 World crops will be higher that demand. Higher energy prices has rallied the Commodity Index to near last November prices. So far this has not helped Grain prices. Most are estimating US March 1 wheat stocks near 1,570 mil bu vs 1,495 last year. Higher stocks due to higher crop and lower export demand. Some estimate Dec-Feb total demand near 460 mil bu vs 415 last year.

Wheat Futures Chart

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2019-03-20T19:37:08+00:00 March 20th, 2019|